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Discount drugs: cure or placebo?

Drug companies say their discount cards help seniors most in need. Critics say the cards are just a way to lessen demand for meaningful health care reform.

By KRIS HUNDLEY, Times Staff Writer
© St. Petersburg Times
published March 9, 2003

Representatives of GlaxoSmithKline PLC scoff at the notion U.S. citizens have to go to Canada for affordable prescriptions, a burgeoning trade the drug giant has attempted to cut off.

"We have prescription savings programs here that can significantly help seniors," said Glaxo's Patricia Seif, referring to drugmakers' discount cards that have proliferated in the past 18 months. "I think these cards would make prices in the U.S. comparable to prices in Canada."

As drug manufacturers face challenges ranging from the Canadian gray market to congressional efforts to control the cost of medicine,several leading pharmaceutical companies have stepped forward with their own remedy for skyrocketing drug prices: discount prescription cards for senior citizens that can be used at the corner pharmacy.

With a wide range of eligibility requirements and savings, these cards have one big advantage for the drug companies over many of the Medicare drug benefits being discussed in Washington: They keep the companies, rather than the government, in control over who saves money and how much they save.

Glaxo introduced the first discount program, the Orange Card, in October 2001. Eli Lilly & Co., Pfizer and Novartis followed last year with their variations on the savings theme. In mid 2002, seven drugmakers, including Glaxo and Novartis, joined under the umbrella of Together Rx to offer discounts on 170 drugs. Since then, Together Rx has enrolled about 600,000 seniors and provided savings of $47-million, a program executive said.

Unlike some third-party drug discount cards that charge a membership fee, the cards sponsored directly by drugmakers are free. But they're not available to everyone. Applicants must:

* be on Medicare,

* not have any other drug coverage, and

* meet maximum annual income requirements that range from $18,000 for an individual for Lilly and Pfizer cards to a high of $30,000 for Glaxo's Orange Card .

While some programs require applicants to submit a copy of their latest income tax return to prove eligibility, the biggest, Together Rx, does not.

"We accept seniors' signature as their word," said Robert Perkins, the card's newly named executive director.

Perkins, who until recently worked in governmental affairs at DuPont Pharmaceuticals Co., describes Together Rx as an example of corporate America's can-do spirit in the face of endless governmental debate. The drugmakers behind Together Rx and the four other proprietary savings programs consider their plans to be short-term measures. All say they support a prescription drug benefit as part of Medicare, though they decline to be more specific about what form such a benefit might take. While President Bush and Congress battle over details, these companies say they're merely filling a need.

"I think it's remarkable to have watched seven companies that are strong competitors in the marketplace get together and address a national need," Together Rx's Perkins said. "I've heard Together Rx called a public relations ploy, but $47-million is proof these are real, substantial savings for seniors most in need."

Critics counter that the cards, with their limited reach and wide range of discounts, merely add to the confusion over the drug benefit debate. The fact pharmaceutical manufacturers can cut charges so dramatically for some customers, the critics say, simply confirms suspicions that regular prescription prices are wildly inflated.

Dr. Thomas Bodenheimer, a San Francisco internist and author of textbooks on health policy, said the cards perpetuate consumer demand for overpriced brands that offer little benefit over lower-cost generics.

"The right strategy for reducing drug costs is to use generics and put some kinds of price controls on drugs, the way other countries do," he said. "Drug companies' profits are the highest of any industry in the world."

Bob Hayes, president of the Medicare Rights Center in New York City, which agrees in principle with the drugmakers' call for a comprehensive Medicare drug benefit, said the discount cards are a double-edged sword.

"We're a consumer group that helps people day in and day out, so if these cards help individuals, I say thank God," Hayes said. "On the other hand, the help they provide is haphazard, scattered and totally unreliable. They should do nothing more than incense seniors over the continued delay in getting a Medicare drug benefit."

Hayes and others say the variety of cards, each with its own qualifications and savings, breeds confusion among seniors.

"Can you picture sweet old ladies with wheelbarrows of these cards, with hopes that one of them may get her a discount?" Hayes said. "And for most people, the older you get, the sicker you are, and the more complicated the discount program, the more unusable it becomes."

Though drugmakers have made applying for their discount cards a fairly simple one-page affair, few make determining the discount easy. Two exceptions: Pfizer, which charges a flat $15 fee for a 30-day supply for any of its drugs, and Lilly, which charges $12. The primary drawback is that customers must refill drugs monthly, paying the fee each time.

For other manufacturers, the guidelines are more complicated. AstraZeneca, for example, also charges a flat fee for its drugs through the Together Rx program. But the fee varies by drug and often by income level. Toprol XL, AstraZeneca's heart and hypertension drug, is just $6 for a 100-count bottle for any cardholder. Arimidex, a breast cancer drug, is $15 if an individual's annual income is less than $18,000 and $40 if the income is between $18,000 and $28,000.

Novartis charges a flat fee of $12 for a month's prescription to seniors with the lowest incomes and gives a 25 to 40 percent discount for those approaching its income ceilings. At Glaxo, the discount available through the Together Rx and Orange cards varies by drug but averages 30 percent, according to the company spokeswoman.

And as Glaxo claimed, in the case of at least three popular drugs, Avandia, Paxil and Coreg, the discount brings the price to within a few dollars of the Canadian price, a difference that could be eliminated by shipping costs.

But Bruce Liddy, owner of a business in Pinellas Park that helps seniors buy drugs from Canada, knows drugmakers' discount cards have one big drawback.

"Most people coming to me make too much money" to qualify for the cards, he said. "These are the bargain hunters, who are looking for creative ways to save money. And they're taking advantage of being able to buy from a source that affords the best price."

Perkins of Together Rx defends the card's income guidelines of $28,000 for an individual and $38,000 for a couple as being plenty generous.

"Our income limits represent 70 percent of the Medicare population that does not have prescription drug coverage," he said. "It helps those most in need."

Hayes of the Medicare Rights Center said his group believes any Medicare drug benefit should be available to all income levels, just like the Medicare program itself. And he worries that stopgap voluntary discount programs, with savings that could be pared or eliminated by drugmakers at any time, are motivated by more than kindness.

"If they can confuse the public to think it's not so dire for American seniors going without prescriptions," he said,"they can further delay the day when they have a smaller profit margin because there will be a large purchaser of their product: the government."

-- Kris Hundley can be reached at or (727)892-2996.

Drug discount cards by the numbers

The following cards are available at no cost to Medicare enrollees who have no other prescription drug coverage and meet the income requirements.

Together Rx card

What it covers: more than 150 drugs made by Abbott Laboratories, AstraZeneca, Aventis Pharmaceuticals Inc., Bristol-Myers Squibb Co., GlaxoSmithKline, Janssen Pharmaceutical Products LP, Novartis and Ortho-McNeil Pharmaceutical Inc.

Income limits: $28,000 individual; $38,000 couple

Benefit: 20 to 40 percent discount

Contact: 1-800-865-7211 or

Orange Card

What it covers: GlaxoSmithKline drugs

Income limits: $30,000 individual; $40,000 couple

Benefit: averages 30 percent discount

Contact: 1-888-672-6436

Pfizer Share Card

What it covers: Pfizer drugs

Income limits: $18,000 individual; $24,000 couple

Benefit: $15 for 30-day prescription

Contact: 1-800-717-6005 or

Lilly Answers

What it covers: Eli Lilly drugs

Income limits: $18,000 individual; $24,000 couple

Benefit: $12 for 30-day prescription

Contact: 1-877-795-4559 or

Novartis Care Card

What it covers: select Novartis drugs

Income limits:

A) $18,000 individual; $24,000 couple

B) $28,000 individual; $38,000 couple


Group A pays $12 for 30-day prescription;

Group B gets 25 to 40 percent discount

Contact: 1-866-974-2273 or

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