Medicare Rx Card Savings May Not Live Up To Expectations


Long-time Senate Chief of Staff to Head D.C. Operations

DALLAS (May 7, 2004) – The Medicare prescription drug card program may not generate the cost savings seniors expect, according to recent research by the National Center for Policy Analysis (NCPA), which shows that many seniors already save as much or more on prescription drugs than the program can provide.

“ "On their own, seniors often pay prices as low or lower than HMOs and other private insurers," said NCPA Senior Fellow Andrew Rettenmaier. In his study, “Who Pays Higher Prices for Prescription Drugs” [http://www.ncpa.org/pub/st/st265/], Rettenmaier examined the prices of more than 36,000 prescriptions for the 39 drugs most commonly prescribed for Medicare patients.

  • For 60 percent of the prescriptions, the study found no significant difference between prices paid by seniors with insurance coverage and those seniors spending their own money.
  • Where prices significantly differ, seniors are twice as likely to pay less than private insurers.

Rettenmaier, who is associate executive director of the Private Enterprise Research Center at Texas A&M University, also examined more than 70,000 prescriptions for an expanded set of 229 prescription drugs and found similar results.

Another recent NCPA study shows that seniors can save a great deal on prescription drugs costs just by becoming smarter shoppers [http://www.ncpa.org/pub/st/st262/].

“Seniors can save a lot of money if they shop for drugs they way they shop for bread,” said NCPA Senior Fellow Devon Herrick, the study’s author. Herrick discovered that in most cases patients can significantly lower drug costs by using techniques common in any market other than health care:

  • Comparison shopping via the Internet among American pharmacies.
  • Buying in large quantities in large dosages and pill-splitting.
  • Purchasing generic drugs or over-the-counter options.
  • Or asking doctors about lower-cost substitute drugs that provide alternative therapies.

Herrick found that by these techniques seniors could often save as much or more than by reimporting drugs.

Both authors are available to discuss the Medicare prescription drug card program and its affect on seniors and prescription drug costs and savings.