Eli Lilly To Participate in Medicare Drug Discount Card Program

Indianapolis-based Eli Lilly is expected to become the first major pharmaceutical company to offer discounted drugs to low-income seniors under the prescription drug discount card program created in the new Medicare law (HR 1), the Wall Street Journal reports. The program, which begins this spring, is intended to serve as an interim drug benefit until the official Medicare prescription drug benefit takes effect in 2006. According to sources familiar with Lilly's plans, the company will begin offering all of its medications for $12 per month to the 70% of Medicare beneficiaries with lower incomes. The discount will be available to beneficiaries with annual incomes at or less than 200% of the federal poverty level; an estimated seven million seniors will qualify. The Journal reports that the $12 monthly cost is a "steep reduction from normal prices" for Lilly's medicines, including drugs commonly prescribed to seniors such as dementia and bipolar disorder treatment Zyprexa, which can cost about $324 for a 30-day supply. The company plans to offer the discounts through cards administered by pharmacy benefit managers and insurers, which are expected to apply to Medicare in the next few weeks to offer the cards. Lilly will not require low-income Medicare beneficiaries to exhaust the $600 annual federal drug subsidy for which they will be eligible this year before participating in the program. According to the Journal, prior to Lilly's decision, it had "been an open question" whether drug companies would place such limits on their discount drug card programs. Enrollment for Lilly's program will begin May 3, and benefits will take effect June 1 (Burton, Wall Street Journal, 1/21).

Employer-Sponsored Retiree Health Care Plans Debated
In other Medicare news, House Ways and Means Committee Chair Bill Thomas (R-Calif.) has sent a letter to HHS Secretary Tommy Thompson refuting earlier reports that employers will be able to exploit a "technicality" in the new Medicare law to pass more health care costs onto retirees while still receiving subsidies to encourage them to retain retiree health coverage, CongressDaily reports. Thomas wrote that allegations that "employers are entitled to the subsidy regardless of how much cost-sharing they require their retirees to pick up -- is not supported by the legislative language in the statute or congressional intent." Thomas emphasized that employers' retiree health care plans are required to be "actuarially equivalent" to the new Medicare benefit to qualify for a federal subsidy. However, AARP Policy Director John Rother said it is likely a "few" employers whose current benefit levels are more generous than Medicare will reduce their benefits, increase retiree costs and still collect the subsidy (Rovner, CongressDaily, 1/21).