Elderly Americans should save 17.4% on Medicare Drug Plan

Main Category: Public Health
Article Date: 14 Apr 2004 - 0:00 PDT

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Elderly Americans as well as the disabled who are enrolled in a Medicare Drug-Discount Card Program should save about 17.4% in costs, this is according to a new study carried out by Harvard University.

According to Tommy Thompson, US Health and Human Services Secretary, Americans who were not covered spend about $672 on prescription products in the year 2000. Tommy Thompson said the Drug Card should mean a discount of about 10-25% for the country's elderly.

The discounts should be about 41% on generics and 14% on brand names, according to a study by the Health Affairs Journal.

Companies will start marketing discount-card plans next month to millions of Medicare patients. How many people take part will depend on how convinced they are by the health care companies.

Many experts say it is difficult to calculate what the total savings will be because of the wide variations in savings. Companies do not have to offer a minimum discount on medicines with the Medicare drug-discount card.

The Havard team who made this study examined seven existing discount-card programs run by the private sector. Their research was sponsored by the Henry J. Kairer Family Foundation.

The team consisted of lead author, Juliette Cubanski, a doctoral candidate in health policy at Harvard University, Richard Frank, a health economics professor, and Arnold Epstein, a professor of health policy and management.

They said that the ones who sign up for a discount card will save the most. They would save 36% on hypertension drugs (alpha-blockers and beta-blockers), 9% on allergy pills such as Zyrtec. They said the average annual savings all round for each Medicare patient will be about $117.

These calculations do not take into account card enrolment fees or changes in drug use and drug prices.

Cubanski said `"Those who now lack prescription drug coverage and who incur large out-of-pocket costs likely will see some relief, but still face sizable out-of-pocket costs."

Total American spending on prescription drugs in 2003 was about $216.4 billion - this includes those already covered by Medicare (IMS Health Inc.). The researchers in this study estimate the total out-of-pocket savings will be as high as about $1 billion annually.

100 companies have applied for Medicare's endorsement of their cards. 28 have won the right to market their cards to patients.

Officials reckon about 7.3 million people will apply for the card. 4.7 million elderly people should qualify for an additional $600 benefit - this will function like a debit card for buying drugs. People will start enrolling on May 3, card use will start on June 1.

Some drug companies are already saying they will give Medicare patients a bigger discount on their drugs than they will give to other patients.

Drug prices in the US have been rising by more than 15% per year. The Republicans say this discount card program is great for patients, the Democrats are saying it does not do enough to lower drug costs.

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