Bush Plan Rx Discounts for Seniors. Part 2

Administration officials said that competition between PBMs will force them to offer a range of discount options to Medicare patients. Some plans will offer seniors larger discounts and fewer drug choices, while others will offer slight discounts on a more expansive list of available drugs or a higher join-up fee.

“Seniors will be able to comparison shop. That is what Medicare is missing right now,” said Leonard Schaffer, CEO of Wellpoint, another PBM cooperating with the White House.

Retail pharmacists said that they oppose the plan because it shrinks their already slim profit margins and will steer patients to mail-order houses that can help trim overall drug costs for PBMs.

“The proposed savings really come off the backs of pharmacies,” said Phil Schneider, a spokesman for the National Association of Chain Drug Stores.

Schneider would not say whether the organization’s 180 member companies–which include Wal-Mart, CVS and Rite-AID–would decline to honor the Medicare discount cards when they are issued.

“That is an individual company decision,” he said.

AARP President Tess Canja said that her organization supports the president’s plan as a first step toward enacting a comprehensive prescription drug benefit. But John Rother, the group’s chief congressional lobbyist, said that final judgment would come as seniors begin to learn what PBMs are and how they cut costs.

“This program is likely to be based on incentives to go to one drug over another. I don’t think we know yet how comfortable seniors will be with that philosophy,” he said.

The plan garnered support from Republican lawmakers, who are preparing to defend a proposal to reform Medicare by privatizing significant parts of the program. Most Congressional Republicans favor legislation that would open up Medicare’s insured benefits, including the proposed prescription drug plan, to competition between PBMs and other healthcare companies.

While providing discounted drugs, the Bush administration’s new program has the additional advantage of preparing private corporations for a future in the Medicare business, said Sen. Bill Frist (R-TN). Frist is the co-sponsor, along with Louisiana Democrat John Breaux, of Medicare reform legislation focusing on private competition.

“It allows for the development of the infrastructure of competition,” Frist told Reuters Health.

Democrats argued that the president was merely trying to distract the public as Congress heads into a tough debate on broad changes to Medicare and the structure of new prescription drug coverage. Rockefeller said that he found it “offensive” that “a president of the United States has come up with something with this lack of depth.”

“He wants to get something out there quickly” before Congress begins negations on reform, Rockefeller said.

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