NCPA - National Center for Policy Analysis


July 30, 2004

The new Medicare discount drug cards offer savings off retail prescription prices, says an independent study commissioned by the Kaiser Family Foundation.

More than 4 million people have the drug cards, though most were enrolled automatically by their health maintenance organizations or state pharmacy assistance programs. The privately marketed cards use bulk purchasing power to negotiate discounts:

  • The best prices for 10 popular medicines, including Lipitor, Fosomax and Celebrex, were nearly a quarter less than the retail price when bought at a pharmacy.
  • Using mail-order services, the drug cards were up to one-third cheaper than retail pharmacy prices.
  • However, the Internet pharmacy advertised prices that were competitive with the discount cards.

The study also said that a bewildering array of choices among more than five dozen drug cards is causing confusion among older and disabled Americans and limiting enrollment in the 2-month-old program.

According to Medicare chief Mark McClellan, Medicare will soon take steps to make enrollment in the program easier by letting seniors sign up electronically.

Source: "Medicare drug-card study finds savings, confusion," Associated Press, July 29, 2004; based upon, Health Policy Alternatives Inc., "Medicare Discount Drug Cards: A Work in Progress," Henry J. Kaiser Foundation, July 28, 2004.


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