Two Pharmacy Groups File Suit to Block Bush’s Drug Discount Plan

The National Association of Chain Drug Stores and the National Community Pharmacist Association on July 18 filed suit in U.S. District Court in Washington, D.C., to block implementation of President Bush's pharmacy discount card plan for Medicare beneficiaries, the Wall Street Journal reports. The two industry groups argue that the administration lacks the "authority" to implement the plan without congressional approval (Lueck, Wall Street Journal, 7/18). Under the plan, the federal government would approve discount cards issued by pharmacy benefit managers, which would use the purchasing power of Medicare beneficiaries to negotiate with pharmacies and drug makers to reach discounts of between 15% to 25% off of drugs' retail prices. Participating PBMs would direct seniors to specific drugstores, create preferred drug lists, fill prescriptions by mail and operate telephone call centers to answer consumers' questions. To participate in the plan, seniors would pay a one-time enrollment fee not to exceed $25 (Kaiser Daily Health Policy Report, 7/13). The pharmacy groups say that the plan forces pharmacies to "shoulder ... discounts" without requiring drug makers to lower prices. Their suit says the administration violated federal rules by drafting the plan without open meetings or a public comment period. Larry Kocot, NACDS' general counsel, said, "This was all done in secret, backroom deals. The process specifically excluded a number of other players in the marketplace, including seniors and pharmacists." HHS Secretary Tommy Thompson and Centers for Medicare and Medicaid Services (formerly HCFA) head Thomas Scully have been named in the suit. An HHS spokesperson "declined to comment" on the lawsuit, but said that "the administration fully backs the discount card as a way to provide seniors immediate relief on drug costs" (Wall Street Journal, 7/18).

Increasing Opposition
The lawsuit is part of an "intensifying campaign" by pharmacists and congressional Democrats against the discount card plan, the Washington Post reports. Both groups are "concern[ed]" that the plan will "not substantially lower" prescription drug costs for seniors and will "squeeze profit margins" for pharmacies (Goldstein, Washington Post, 7/18). Pharmacy groups also say the plan offers a "false hope" for seniors, because many pharmacies "won't honor the discounts." NACDS and NCPA are "jointly lobbying" lawmakers to block the program. Reps. Marion Berry (D-Ark.), Mike Ross (D-Ark.) and Vic Snyder (D-Ark.) yesterday "blasted the program," the Journal reports. Ross, who owns and operates a pharmacy, said, "This bogus discount prescription drug card leaves our seniors with no meaningful relief, does nothing to hold the big drug manufacturers accountable and places the entire burden of any possible savings on your hometown pharmacy" (Wall Street Journal, 7/18).

Opposition Similar in States
Discount pharmaceutical programs in Washington state, New Hampshire, Iowa and West Virginia that "closely resemble" Bush's card plan have met "intense ... and effective" industry opposition, the Post reports. In Washington state, where "the opposition has been most intense -- and effective" -- a "coalition of pharmacy groups" last winter successfully blocked that state's program in court by arguing that Gov. Gary Locke (D) "lacked the authority" to create a discount card system. New Hampshire's pharmacy discount program, which has been operating for 18 months, has been "hindered ... in subtler ways" because "some pharmacies have been reluctant to participate." In Iowa, a pharmacy discount program proposed last fall by Gov. Tom Vilsack (D) and Sen. Tom Harkin (D-Iowa) has "taken longer than expected to start," partly because the state has worked "closely with local pharmacists" to "avoid hurting them financially" (Washington Post, 7/18). More information on Bush's plan in available from the government online.