NCPA - National Center for Policy Analysis

GAO Finds Some Savings From Drug Discount Cards

January 4, 2002

Drug discount cards of the type proposed by President Bush for Medicare recipients cut costs for consumers by up to 36.8 percent, according to a report by the General Accounting Office. But according to Robert Pear of the New York Times, the average savings are "not significant."

The GAO collected 493 price quotations, showing charges for 17 drugs (12 brand-name products and 5 generic drugs) bought from 29 sources (5 discount card programs, 19 drugstores and 5 Internet pharmacies).

  • For people using discount cards, the average price for 12 of the most widely used brand-name drugs was $62.94, which is 8.2 percent less than the average of $68.58 charged at retail pharmacies in Chicago, Seattle and Washington.
  • The discount cards produced more substantial savings, averaging 12.8 percent, at five drugstores in rural Georgia.
  • People using the cards also got larger savings, in percentage terms, on generic drugs, reducing the average price for a generic drug by 36.8 percent, to $5.69, from the $9 charged to people without cards.

But because generic drugs are already cheaper than brand name ones, Pear says they would only save a few dollars on each prescription.

The GAO found that in at least one of stores they surveyed -- and sometimes more than one -- a person without a discount card could walk in off the street and buy one or more of the brand name drugs for slightly less than someone with a discount card could. And prices varied across the country and between rural and metropolitan areas.

Source: Robert Pear, "Drug Discount Cards Give the Elderly Small Savings," New York Times, January 4, 2002.  


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