California's prescription drug discount program can save Medicare beneficiaries 20% off retail drug prices, but many seniors, especially those with low incomes, may be missing out, according to an article in the March 14 New England Journal of Medicine. The study of 500 pharmacies found that while 75% provided the state-mandated discount, fewer than half did so without the customer specifically asking for it.
"Our findings suggest that low-income seniors who could benefit the most from these discounts may not be receiving them," according to lead investigator Joy H. Lewis, D.O., of the Veterans Affairs Greater Los Angeles Healthcare System and RAND Health. "Beneficiary awareness of drug discount laws and provisions for monitoring pharmacy compliance are crucial."
In California, pharmacies that participate in the Medi-Cal program are required to offer seniors discounted prices. To obtain the savings, Medicare beneficiaries must present their Medicare card at the pharmacy, something they are not used to doing since Medicare does not cover prescription drug costs. The law, which went into effect February 1, 2000, did not include provisions for beneficiary education or monitoring pharmacy compliance. The California HealthCare Foundation commissioned RAND Health to assess how well the new law was working and where improvements might be necessary.
The study involved 500 pharmacies in Los Angeles County and the San Francisco Bay Area. Medicare beneficiaries with acting experience were enlisted to test at what point a participating pharmacy would offer the Medicare discount -— when the seniors initially asked about prices, when they asked about a "senior discount," when they requested a "Medicare discount," or not at all. They checked the prices of three medications used to treat chronic conditions that frequently afflict seniors: Vioxx, Zoloft, and Lipitor. Applying the discount, a senior would save $55.70 each month for the three drugs, compared to retail prices.
Differences in compliance with the law were found among pharmacies by region, pharmacy type, and neighborhood income level. Compliance was higher among chains than independent pharmacies (91% vs. 58%); higher in the Bay area than Los Angeles County (84% compared to 72%), and higher among pharmacies located in high income than in low-income zip codes (81% compared to 69%).
California's current senior prescription discount law is scheduled to sunset at the end of this year and a new law has been introduced to extend the program indefinitely. "Making sure California's Medicare beneficiaries have the best law possible is our goal. The discount drug program has the potential to help tens of thousands of California seniors with one of their biggest out-of-pocket expenses," said Marianne Laouri, Ph.D., a senior program officer with the California HealthCare Foundation. "We hope that policy makers, pharmacists, and consumers work together to ensure that seniors get the discounts they are entitled to receive."
"The California experience can serve as a lesson for the design of similar federal and state programs," Dr. Lewis said. Eighteen states introduced bills in 2001 that would make Medicare beneficiaries eligible for discount prices based on Medicaid rates. The authors suggest states consider outreach through mail and Internet campaigns and signs posted in pharmacies. Requiring Medicare beneficiaries to enroll in the discount program and providing beneficiaries with special discount cards to present at pharmacies are also suggested as ways to reinforce beneficiary awareness.
RAND is a nonprofit institution that helps improve policy and decision-making through research and analysis. Collaborating with Dr. Lewis on the study were RAND investigators Jose Escarce, M.D., Ph.D.; Matthias Schonlau, Ph.D.; Jorge Munoz, M.S., M.Phil.; Mayde Rosen, R.N., B.S.N.; and Hannah Yang, B.S.P.H; and Steven Asch, M.D., M.P.H., of Veterans Affairs and RAND.
The California HealthCare Foundation, based in Oakland, is an independent philanthropy committed to improving California's health care delivery and financing systems. CHCF's work focuses on informing health policy decisions, advancing efficient business practices, improving the quality and efficiency of care delivery, and promoting informed health care and coverage decisions. The study is one in a series of CHCF activities aimed at understanding the range of options for expanding access to affordable medications for seniors.
This study is available for download from the New England Journal of Medicine Web site; NEJM generally requires a paid subscription, but CHCF visitors may access this article only through the special link below to NEJM. Reprints of the article will be available for free.