Medicare Drug Discount Card pricing is lower than internet and mail-order pharmacy prices

A new study by the Centers for Medicare & Medicaid Services (CMS) found that prices available from Medicare-Approved Drug Discount Cards are lower than current Internet and mail-order pharmacy prices.  In particular, the CMS analysis showed that the mail order pharmacy prices offered by the Medicare-approved cards for a set of commonly-used drugs beat the Costco.com price by 20 to 24 percent and Drugstore.com by 7 to 11 percent.  Further, even though retail pharmacy prices are typically significantly higher than Internet or mail-order prices, the discounted prices available at retail pharmacies for Medicare-approved cards were lower than Costco.com by 4 to 7 percent and lower than Drugstore.com by 1 to 4 percent.

“When you compare the price of drugs seniors pay at their local pharmacies – where most seniors prefer to buy their medicines – the Medicare-approved cards offer real savings,” said Health and Human Services Secretary Tommy G. Thompson.   “But for the many seniors who buy their drugs online or through the mail using these Medicare-approved cards, they will also receive terrific savings when compared to other Internet pharmacies.” 

The new findings build on earlier analysis that showed that the Medicare-approved drug discount cards had savings of at least 10 to 17 percent for brand name drugs, and 30 to 60 percent or more for generic drugs, compared to the actual average retail prices paid by all Americans (including those receiving discounts through public or private insurance).  Earlier studies also showed that millions of low-income Medicare beneficiaries will see even larger savings when these discounts are combined with the $600 credit and additional low-income discounts from drug manufacturers.

“Four out of five seniors and people with disabilities prefer to buy their drugs from their neighborhood pharmacies, where they can get face-to-face advice and quick access to their medicines from a pharmacist who knows them,” said CMS Administrator Mark B. McClellan, M.D., Ph.D.  “So it’s important for beneficiaries to know that Medicare-approved cards can get discounted prices at those stores are as good – or better – than they can get online. And in ‘apples-to-apples’ comparisons of mail-order prices, the Medicare-approved cards provide substantial savings.”

CMS analyzed prices on a basket of ten brand name drugs most commonly used by Medicare beneficiaries.  Key findings show:

• The mail order prices offered by the Medicare-approved cards beat the Costco.com price by 20 to 24 percent and Drugstore.com by 7 to 11 percent.
• The retail prices offered by the Medicare-approved cards were lower than the Costco.com prices by 4 to 7 percent and lower than Drugstore.com by 1 to 4 percent.
• The savings do not account for the additional charges (membership fees, shipping) at Costco.com and Drugstore.com – so the total savings are actually even greater.

Eighty percent of Medicare beneficiaries buy their drugs at their neighborhood drugstores according to the federal Agency for Healthcare Research and Quality’s Medical Expenditure Panel.  In a survey of Medicare beneficiaries in 2001 (the most recent year available), 19 percent of beneficiaries who said they bought at least one drug said they used mail order pharmacies.

“The Medicare-approved discount cards allow seniors and people with disabilities to choose how they want to buy their medicines,” said Dr. McClellan.  “We are making it as easy as possible for Medicare beneficiaries to enroll in the card programs and get new savings on their medicines right away.”

CMS also reminds Medicare beneficiaries that the simplest way to find out about the Medicare-Approved Drug Discount Cards mean for you is to call 1-800-MEDICARE or log onto www.medicare.gov.   If you are prepared with your zip code, your list of medicines and dosages, your preferred drug store, and your income (if you think you may qualify for the $600 credit), you can get the facts and a personalized brochure in just a few minutes. 

The comparisons report can be viewed at: http://www.cms.hhs.gov/medicarereform/drugcard/reports/online_comparison_report.pdf