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The Bush So-Called “Discount” Prescription
Drug Card Plan

Confused? Join the club.

Facts   |    Figures   |   Plan Price Comparison

FACT: Bush’s “discount” prescription drug card plan creates a bewildering bureaucracy.

To find the best deal, seniors and people with disabilities must wade through 73 different “discount” card plans.[i]

No card is guaranteed to cover all of your drugs, and the drug companies can change which drugs they cover as often as once a week.[ii]

Once you choose a card you’re locked in for the year; you can’t drop or change plans, even when your card company drops coverage of your prescription drugs.[iii]

FACT: Bush’s “discount” prescription drug card plan offers no significant discount.

Card companies may raise drug prices as often, and as much, as they like.[iv]

The “discount” cards only offer savings of 10 to 25 percent on prescription drug prices – prices that continue to rise.[v]

Since Bush came into office the prices of the 26 most frequently used medications have increased by over 21 percent.[vi]

FACT: The Bush Medicare prescription drug law prohibits Medicare from negotiating for the lowest prices for all drugs and instead offers seniors a so-called “discount” card.[vii]

The Department of Veterans Affairs (VA) negotiates the lowest drug prices available in the United States for our veterans.  The VA purchases the top ten drugs most frequently prescribed to seniors and people with disabilities at prices lower than the lowest prices available with the “discount” cards.[viii]

The VA purchases Protonix, for example, for a third of the cost of the lowest price available to Medicare beneficiaries using a “discount” card.[ix]

There are over 40 million people enrolled in Medicare, far more than the 25 million represented by the VA, making their ability to negotiate that much more powerful.[x]

FACT: Bush’s prescription drug law makes it illegal to import prescription drugs from Canada, where the costs are up to 80 percent less than the prices offered by Bush’s “discount” prescription drug card plan.

Canada negotiates with U.S. drug companies for some of the lowest prescription drug prices possible – prices lower than those available in the United States, including prices available with a “discount” drug card.[xi]

It is still illegal for seniors to import their prescription drugs from Canada.[xii]

Drug companies, on the other hand, are permitted to import drugs from other countries, including Canada, and have moved production of some of their top-selling medications overseas.[xiii]

FACT: Bush called his Medicare prescription drug law a “victory for seniors.”  In fact, the biggest winners are the HMO’s and pharmaceutical companies—not the seniors and people with disabilities who need a real prescription drug benefit.

Bush’s Medicare prescription drug law is expected to produce a $139 billion windfall for HMO’s and major drug companies.[xiv]

Card companies are free to take a cut of the savings offered to them by drug companies—they are not required to pass on the full discount to Medicare recipients.[xv]

Card companies have access to personal information—like what types of medication you are taking and how often you get a prescription filled.  Many of these companies are insurance providers and businesses that can use this information to deny future coverage.

The pharmaceutical industry was the 10^th largest contributor during the 2002 election cycle, contributing a total of $29.4 million to federal candidates and parties.  Seventy-four percent of those campaign contributions went to Republican candidates and the Republican party; 26 percent went to Democratic candidates and the Democratic party.[xvi]

 

[i] Center for Medicare and Medicaid Services, “Medicare Drug Discount Cards Continue to Drop Prices and Offer Better Savings,” May 14, 2004. Available online at: http://www.cms.hhs.gov/media/press/release.asp?Counter=1049
[ii] Families USA, “The New Medicare Prescription Drug Discount Card: A Flawed Program,” December 19, 2003.  Available online at: http://www.familiesusa.org/site/PageServer?pagename=medicare_drug_discount_card
[iii] Official Medicare website: http://www.medicare.gov/
[iv] See Endnote iii
[v] Families USA, “Sticker Shock: Rising Prescription Drug Prices for Seniors,” June 2004, p. 14. Available online at: http://www.familiesusa.org/site/DocServer/Sticker_Shock.pdf?docID=3541
[vi] See above.
[vii] Letter from the Congressional Budget Office to Senator Don Nickels, November 20, 2003.
[viii] Families USA, “Price Comparison: The Department of Veterans Affairs, Canada, Drugstore.com and the Medicare Discount Card,” 2003.
[ix] See above.
[x] Department of Veterans Affairs, VetPop2001.  Available online at: http://www.va.gov/vetdata/demographics/index.htm
[xi] See above.
[xii] Campaign for America’s Future, “Bush Prescription Cards: Seniors get maximum confusion – campaign contributors get millions,” 2004.  Available online at: http://www.ourfuture.org/docUploads/rx_card_key_points.pdf
[xiii] Families USA; New York Times, 9/20/03.
[xiv] Campaign for America’s Future, “What Bush Says vs. The Facts,” 2004.
[xv] See Endnote xi.
[xvi] OpenSectrets.Org online at: http://www.opensecrets.org/

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Bush’s Medicare Law: By the Numbers

• Number of seniors and people with disabilities who qualify for Medicare benefits: 40,000,000

• Percentage of maximum savings most analysts predict Medicare beneficiaries will receive using Bush’s “discount” drug card plan: 10% to 15%

• Percentage increase in price of the 26 drugs most frequently used by seniors since President Bush took office: 21%

• Lowest price of a one-month supply of Protonix (one of the most commonly prescribed medications) available using a Medicare approved “discount” drug card: $87.49

• Cost of a one-month supply of Protonix imported from Canada: $42.06

• Cost of a one-month supply of Protonix for Veterans: $26.83

• Number of customer service representatives hired to take phone questions from Medicare’s 40 million beneficiaries about Bush’s “discount” drug card plan: 1000

• Number of phone calls placed to Medicare’s drug card help desk the first week the phones opened: 1,600,000

• Estimated wait time to get through to a Medicare help desk representative: More than 20 minutes

• Total contributions made to federal candidates and political parties by the pharmaceutical industry in the 2002 election cycle: $29.3 million

• Total contributions made to Republicans by the pharmaceutical industry in the 2002 election cycle: $21.7 million

• Total contributions made to Democrats by the pharmaceutical industry in the 2002 election cycle: $7.6 million

• Amount pharmaceutical companies have contributed to President Bush’s campaign: $708,209
  
• Amount pharmaceutical companies have contributed to Senator Kerry’s campaign: $70,500
  
• Projected windfall Bush’s Medicare prescription drug law will produce for major drug companies, including massive tax breaks and payouts to HMO’s: $139 billion

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Bush's "Discount" Drug Card Plan: A Price Comparison

Notes

Drugs: This list is the ten drugs most frequently prescribed to seniors in 2003, in order, based on claims volume from Pennsylvania’s senior prescription drug program, PACE, the largest outpatient prescription drug program for seniors in the country. 

VA Prices: VA prices are prices for the Federal Supply Schedule and reflect what the Department of Veterans Affairs pays for these drugs. The prices were current as of April 26, 2004 and were collected from the Pharmacy Benefits Management Strategic Health Care Group in the Department of Veterans Affairs. Prices are calculated based on the number of units available through the Federal Supply Schedule that most closely matches the number of units shown in the table.

Canadian Prices: Prices are for Ontario and reflect the amount the Ministry of Health will reimburse. The information is from the Ontario Drug Benefit Formulary/Comparative Drug Index, Edition 38, Update C, April 6, 2004. In Canada, Protonix is marketed as Pantoloc.

Currency Conversion: Canadian currency conversion from XE.com, mid-market rates 4-22. $1 CAD = $.737911 USD

Drugstore.com prices: Prices for Drugstore.com were collected on April 19 to capture prices available prior to the Medicare discount card. Drugstore.com is an internet prescription drug vendor; its prices are available nationally.

Medicare Discount Card Prices: Prices reflect thelowest and highest prices listed for participating Medicare drug discount cards offered in 10 zip codes representing a diverse combination of rural and urban areas (Cincinnati; Detroit; Las Vegas; Los Angeles; Miami; New York; Olin, Iowa; Pittsburgh; Santa Fe; and Seattle). For urban areas, zip codes were searched for pharmacies in a 3-mile radius. For rural areas, the search was for a 15 mile radius. This corresponds to access requirements for prescription drug plans under the Medicare drug benefit. Prices are those posted April 29on Medicare.gov.                    

“Discount”: The price paid by the Department of Veterans Affairs for each of the listed drugs is lower than the lowest price available to seniors and people with disabilities using a “discount” drug card.  This column reflects the range in lost savings, or lack of a discount, to drug card users.  The lost savings is reflected by the range in the difference between the price paid by the VA and the lowest and highest prices available to card users.

Acknowledgements: This chart is based on a similar chart prepared by Families USA, “Price Comparison: The Department of Veterans Affairs, Canada, Drugstore.com and the Medicare Discount Card.”