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Pharmaceutical Companies Offer Discount Plans to Seniors

Geriatric Times

January/February 2002

Vol. III

Issue 1

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As the debate continues between the U.S. Congress, the White House and the courts over a Medicare discount card for prescription drugs, two pharmaceutical companies have stepped in with discount programs of their own. Last October, GlaxoSmithKline (GSK) announced the launch of its Orange Card program, which offers savings on its outpatient prescription drugs to eligible low-income seniors. In the following month, Novartis unveiled its senior discount program, CareCard.

Both programs, which were to start Jan. 1, are available to individuals who are over 65, have an annual income less than 300% of the federal poverty level ($26,000 for an individual or $35,000 for a couple) and have no other prescription drug coverage. The GSK plan also includes people who qualify for Medicare due to a disability but are not yet 65 years old. A discount of 25% off wholesale list price is offered by both plans, and both companies estimate that additional discounted pharmacy prices could lead to a 30% to 40% discount on retail prices for seniors.

Two differences between the plans are method of enrollment and administration. Patients sign up through their physician's office for GSK's Orange Card, which will be administered by Express Scripts Speciality Distribution Services. Novartis' CareCard, on the other hand, will be available through pharmacies, to which Novartis will pay $5 per enrollee. McKesson Health Solutions will administer CareCard. According to Novartis, this administrative structure will allow "other pharmaceutical companies to add their own independent programs into this common offering architecture."

The National Association of Chain Drug Stores (NACDS), which is one of several groups fighting a federal discount card plan, initially seemed in favor of GSK's Orange Card. In a statement to the press, NACDS president Craig L. Fuller said, "It is certainly significant when a major pharmaceutical drug manufacturer steps up and pledges to provide a substantial discount on the prescription drugs purchased by needy seniors."

By the time Novartis made its announcement, however, it appeared the NACDS had had second thoughts. On Nov. 7, 2001, Fuller released a statement to the press saying, "NACDS does not believe a myriad of 'discount cards' are the right answer to the lack of prescription drug coverage for many of America's seniors." The NACDS claims that manufacturers' charges for prescription drugs are "the root causes of high prescription drug prices."

Another opponent of the pharmaceutical companies' discount plans is health care advocacy group Families USA. They claimed that, in their survey of the 50 drugs most commonly used by seniors, Novartis was represented only by osteoporosis drug Miacalcin (calcitonin-salmon), which was No. 26. At Nos. 4 and 15 were two dosage forms of GSK's antiarrhythmic drug Lanoxin (digoxin), and its antidepressant Paxil (paroxetine) was at No. 42.

When asked about this survey, Novartis spokesperson Martha Grant told Geriatric Times that Novartis has several new drugs for conditions that affect seniors, such as Exelon (rivastigmine) for Alzheimer's disease. Mary Anne Rhyne from GSK agreed, telling GT that GSK also has a number of medications for conditions such as diabetes, heart disease and respiratory disorders that mainly affect seniors.

Tommy Thompson, secretary of the U.S. Department of Health and Human Services, was present at the announcements of both discount programs. While applauding the action of GSK and Novartis, Thompson noted that the high cost of prescription medications is a complex problem and its solution may take many different forms. At the Novartis press conference, Thompson further commented, "Moving forward, it will be necessary for the Administration, the Congress, and the private sector to work together to formulate a more comprehensive solution to this challenging problem" (To find out what the government is doing to help seniors with prescription costs, please see related article "States Step In With Plans To Lower Prescription Drug Costs for Seniors"--Ed.) -- EAD