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Thursday, July 12, 2001 - Page updated at 12:00 AM

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Pharmacy-discount plan draws criticism

The Washington Post

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WASHINGTON — The White House yesterday said that a new pharmacy-discount card for older Americans would offer elderly patients deep price cuts on medicine and enable them to shop easily for the best deal on the specific medicine they take.

But Democrats immediately criticized the new White House plan as not going far enough to defray the large drug expenses of people on Medicare, and a senior Bush adviser said the discount card “is not a substitute” for adding drug coverage to the federal health-insurance program for the elderly.

The discount plan, which the administration says can be put into place by the Department of Health and Human Services by next year without congressional approval, also drew a swift, skeptical response from organizations that represent pharmacists, who predicted that older Americans could end up receiving discounts at the industry's expense.

Bush formally will unveil the discount program at a White House ceremony this morning at which he also will announce a set of eight principles that he hopes will guide Congress as lawmakers this summer begin a new round of debate over how to revamp Medicare, the federal health program for the elderly.

Aides offered details yesterday of how the discounts would work. Using a market-based approach, the plan would rely on companies that manage pharmaceutical benefits to negotiate reduced prices with drug manufacturers and pass on the discounts. Drug companies, the theory goes, would be willing to offer discounts — of as much as 20 percent, in some cases — because of the prospect of a large volume of sales.

According to a senior administration official, the agency that runs Medicare would set rules for companies that want to offer discount cards, requiring them to affiliate with large numbers of pharmacies and to offer discounts in every major class of medication.

All Americans age 65 and older would be eligible to select one card at a time and would be able to switch cards frequently in order to allow them to select the one that offers the best prices. The companies managing benefits could charge a signup fee of up to $25.

Medicare would run a public-information campaign about the discount program starting this fall, the aide said. Within two years, Medicare would publish information about how much each company offering discounts charges for specific medicine, allowing patients to do comparison shopping.

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