Pfizer to Expand Drug Plan
Pfizer Inc. will expand its discount prescription drug program to potentially reach 43 million uninsured Americans in the face of increasing criticism of the soaring cost of medicine in the United States.
The world’s biggest drug maker said Wednesday that it would offer discounts to uninsured families of as much as 37% off retail prescription prices, and that it would expand discounts for Medicare beneficiaries by charging them a flat fee of $15 per prescription.
Health insurance premiums -- driven partly by prescription drugs -- rose 13.9% in 2003, the third consecutive year of double-digit increases, according to the Kaiser Family Foundation, a nonprofit health research group.
At the same time, most drug makers have enjoyed strong profit growth, prompting employers and lawmakers to look for ways to curb price hikes. Rising drug costs and the uninsured are key political issues this year.
“It gives [Pfizer] an edge in front of legislators and regulators when they are in discussions with them on hard issues like re-importation of drugs from Canada and pricing,” said Sena Lund, an analyst at Cathay Financial.
Most major pharmaceutical companies already offer discounts to the uninsured and those on Medicare, but this effort appears to offer bigger discounts to more people, according to Bob Hayes, president of the Medicare Rights Center, a nonprofit consumer group.
Still, access programs have a poor track record in signing up members, Hayes said, noting that the people in greatest need are least able to negotiate the application process.
For example, another Pfizer discount drug program called Share Card enrolled just 600,000 seniors. The company said 5 million were eligible, and Hayes said 15 million could “potentially” benefit.
Wall Street analysts said cutting prices on medicines under this program probably would be neutral to Pfizer’s bottom line.
Higher volume would probably offset lower prices, said Barbara Ryan, a pharmaceutical analyst at Deutsche Bank.
Pfizer said low-income Medicare members on all U.S.-approved drug discount cards would have access to many Pfizer medicines after they have exhausted a $600 credit from the federal government.
Medicare, the U.S. federal health insurance program for 41 million elderly and disabled people, does not currently provide prescription drug coverage for its members.
Under the plan, uninsured families earning less than $45,000 a year can buy medicines at prices similar to those paid by large purchasers such as employers and health maintenance organizations.
Families without drug coverage making more than $45,000 would be eligible for average savings of 15% off retail prices.
New York-based Pfizer shares closed down 15 cents at $33.72 on the New York Stock Exchange.
