Novartis Offers Drug Discount Program

Novartis Pharmaceuticals Corp. on Wednesday became the second company to launch a prescription discount program for low-income elderly Americans, but analysts said it would not lower costs enough for many seniors.

The move by the unit of Swiss drug giant Novartis follows a similar announcement last month by GlaxoSmithKline in response to growing demands for price relief. One-third of Medicare recipients lack prescription-drug coverage; but since Sept. 11, the issue of adding a drug benefit to the federal health insurance plan for the elderly has dimmed.

Washington-based policy analyst Ira Loss of Washington Analysis said the discounts would help some people, but the drugs still would be too expensive for many of the elderly poor, even with discounts of 25% or more

Ron Pollock, director of consumer group Families USA, said few Novartis drugs are widely used by seniors. Only Miacalcin, a nasal spray for osteoporosis, appears on Families USA’s top 50 drug list, he said.

Novartis Pharmaceuticals Chief Executive Paulo Costa said the company’s program, which is called CareCard and will be offered at no cost, could help Novartis increase its market share of some drugs. But he said it is more likely that the program will shave profit at the U.S. arm of the drug company, though not significantly.

He said 10 million Medicare recipients will be eligible for the card, which is for people without prescription-drug insurance and whose incomes top out at $26,000 for singles and $35,000 for couples.

Novartis said consumers would save $100 billion over the next decade if each drug company adopted a similar drug discount program.

The company said it plans to distribute the discounted drugs primarily through retail pharmacies. But pharmacy groups gave the program a lukewarm reception, in part because Novartis is asking drugstores to lower their markups. Novartis will discount its wholesale list price by 25% for participating drugstores, but it wants them in turn to lower their prices to save consumers a total of 30% to 40%.

American depositary receipts of Novartis fell 14 cents to close at $38.20 on the New York Stock Exchange.