President Bush proposed Thursday to give older Americans a financial boost in paying for prescription drugs without creating a financial drain for the government.
The president called for a program in which Medicare participants could join a national drug discount program, offering lower prices through the economics of large group purchases.
“The new drug discount plan combines the purchasing clout of millions of seniors to negotiate lower prices than under the current system,” Bush said. “And under my plan, participating pharmacies will get new customers and seniors will get high-quality drugs at a lower price.”
The plan was a first, cautious step by the White House to meet the widespread demand to protect the elderly from the escalating cost of prescription drugs without further endangering the Medicare program, which is on course to run out of money in about 25 years. Medicare does not pay for prescription drugs.
Advocates for consumers and the elderly quickly criticized Bush’s plan as insufficient. “It offers precious little relief for seniors,” said Ron Pollack, executive director of Families USA, a nonprofit, nonpartisan group.
He said the drug discount cards at the center of Bush’s plan would offer some help. But, he said, “it is no substitute for expanding Medicare prescription drug coverage for seniors.”
Bush presented the proposal during a White House Rose Garden speech to representatives of the drug industry, members of Congress and several elderly people struggling with drug costs. His address revived his program for reforming Medicare by offering participants a choice between an overhauled government program or nongovernment insurance plans.
The president said the drug discount plan would be similar to those offered by some insurance programs and drug purchasing groups. Individuals would pay $1 or $2 a month for a card entitling them to buy pharmaceuticals at what are advertised as discounted prices.
Under the White House plan, the government would encourage and license private operations. The program would take effect next year and would not require legislative approval.
The White House said the plan would offer discounts of 25% on typical drugstore purchases and 50% on mail-order purchases.
“The drug discount plan is the first necessary step to provide immediate help to seniors without establishing Medicare’s finances,” Bush said, reflecting opposition to steps that would increase Medicare’s operating costs. “It is not a substitute for a drug benefit and for strengthening Medicare.”
Rep. Henry A. Waxman (D-Los Angeles) questioned whether discount buying programs could be counted on to save money. He pointed to a study, conducted by the Democrats’ staff on the House Government Reform Committee, that found that one-month supplies of the five best-selling drugs for the elderly cost an average of $426.08 when purchased through five private drug card programs and $433.23 when bought from an online retailer.
Bush’s proposal split various camps in the health care industry and advocates of the elderly.
The organization representing major drugstores opposed it. The American Assn. of Health Plans, representing health maintenance organizations and other health groups, said it would help seniors choose “affordable, high-quality private-sector health plans that best meet their needs, including those providing prescription drug coverage.” AARP already operates its own prescription drug purchasing plan for its membership of older Americans.
Craig Fuller, president and CEO of the National Assn. of Chain Drug Stores, said that the drugstores support the concept of a drug benefit but that the president’s plan would not be workable.
“The needy senior having a hard time buying a prescription is going to be given a false sense of relief,” he said, while the discounted sales would cut into the drugstores’ profit margin, now just 2%.