State to unveil plan for drug discounts

A program modeled after one in Ohio will be announced today.

By STEPHEN NOHLGREN, Times Staff Writer
Published December 20, 2007

ST. PETERSBURG - Florida is about to start negotiating with drug manufacturers and pharmacies to provide discounted prescriptions to low- and middle-income residents and to people older than 60.

Gov. Charlie Crist will announce the program, patterned after one in Ohio, at news conferences in Tallahassee and St. Petersburg today.

People who qualify will receive a discount card they can present at most pharmacies to buy brand name and generic drugs at lowered prices.

Savings will average 20 to 30 percent off the retail price, the state estimates, although people who currently shop aggressively for discounts could receive considerably less benefit.

In essence, Florida will pool unrelated groups of people to negotiate discounts just as states already do with Medicaid programs for the poorest of the poor, or large health insurance companies do for employers and unions.

On Thursday, Florida signed a contract with Ohio's Envision Pharmaceutical Services to help administer the program, Florida Secretary of Elder Affairs Douglas Beach confirmed late Thursday.

"It's a tremendous program," Beach said.

Crist's office would not comment on the discount card Thursday. But according to state documents, the program would work like this:

-People younger than 60 with no prescription drug insurance would qualify if their incomes fall below 300 percent of the federal poverty line. That comes to $30,630 for a single person, $41,070 for a couple and $61,950 for a family of four.

-People older than 60 with no other drug coverage could qualify without any income limitation.

-People on a Medicare Part D drug plan could use the card to defray costs once the initial coverage limit is reached, what is sometimes called the "doughnut hole." Based on Ohio's experience, those savings may be lower because Medicare plans already negotiate discounts, even in the doughnut hole.

-The only up-front charge would be a $1.50 "activation fee" the first time someone used the card.

The state is expected to unveil a Web site today with more details.

Ohio Best Rx cards "have been a godsend" for people who use lots of prescription medications but lack drug insurance, said Roland Hornbostel, deputy director of the Ohio Department of Aging.

"I believe Florida is going to be similar, covering people of all ages," he said.

An Ohio government Web site says savings have averaged 34 percent off the retail price where the cards are used.

As with all discounts cards, however, savings depend on where you shop.

The St. Petersburg Times compared the cost of nine drugs commonly used by older people on the Ohio Best Rx's Web site against prices at Costco, a big retailer that often discounts prescription drugs for members.

The Ohio Best Rx card beat Costco by as much as 11 percent, but sometimes by less than 5 percent. In one case - 20-milligrams of cholesterol-lowering Zocor - the Costco price was 37 cents a month lower than the Ohio price.

Wal-Mart, Kmart and several other large outlets sell some generic drugs for $4 or less, which can be cheaper than buying them with the state discount card.

"If you can get a $4 generic or take the Ohio Best Rx card, by all means take the $4 generic," said Hornbostel.

Private discounters, however, don't cover as many drugs as the Ohio program does, Hornbostel said. Ohio negotiates directly on hundreds of brand-name drugs from 27 manufacturers, he said. The state also negotiates discounts on generic drugs from pharmacies.

"We have a supermarket chain called Giant Eagle that will say they have 400 generics that you can buy for $4, but they count every dosage. The reality is somewhat less," Hornbostel said.

Ohio, which began its drug discount program in 2005, figures that roughly 1.2-million people are eligible for its card, but only about 112,000 have signed up. Many low income people don't take prescription drugs, and many people on Medicare are confused about how the discount card meshes with their Medicare drug plans, Hornbostel said. If more people enrolled, Ohio could wield more clout and get better discounts, he said.

The state does the negotiating and pays Envision Pharmaceuticals to process the claims. Total program costs are about $1-million, and Ohio collects about $300,000 in rebates from manufacturers on brand-name drugs, he said. That leaves a $700,000 annual tab for taxpayers.

Oregon, Colorado and Arizona have similar programs, Hornbostel said, although those states delegate price negotiations to private pharmacy benefit management firms.

Fast facts

The program

Florida expects to pattern its drug discount program after one in Ohio. Here is how that program works:

- People younger than 60 with no drug insurance qualify if their incomes fall below 300 percent of the federal poverty line.

- People older than 60 with insurance qualify without any income limit.

- People on Medicare use the card to buy drugs while in their Part D drug plan's "doughnut hole."

[Last modified December 20, 2007, 00:28:00]