PCMA Analysis Finds Medicare Prescription Drug Discounts 'Real & Holding Steady' in First 30 Days

2/7/2006 11:13:00 AM

To: National and Business Desks, Health Reporter

Contact: Phil Blando of the Pharmaceutical Care Management Association, 202-207-3614

WASHINGTON, Feb. 7 /U.S. Newswire/ -- One month into the new Medicare prescription drug benefit, discounts on the top 25 drugs prescribed to seniors and the disabled are holding steady with an average 35 percent savings on drugs purchased at a retail pharmacy compared to cash-paying customers and 46 percent for drugs purchased through the mail-service pharmacy option, according to a new analysis of Medicare drug prices released today by the Pharmaceutical Care Management Association (PCMA). PCMA is the national association representing America's pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 200 million Americans with health coverage provided through large and small businesses, health insurers, labor unions, and Medicare.

PCMA's analysis of Medicare drug prices is based on prices posted on Medicare's "Prescription Drug Plan Finder" for the top 25 drug products most commonly used by seniors in five national prescription drug plans (PDPs). PCMA's analysis of drug prices was based on PDP negotiated prices of Feb. 3, 2006.

"PDPs are working hard to provide seniors and the disabled with an affordable benefit that provides choice and coverage for the drugs they need. Thirty days into the new Medicare prescription drug benefit, PCMA's Medicare drug-pricing analysis finds that drug discounts for Medicare beneficiaries are real and holding steady," said PCMA President Mark Merritt. "While PDPs and PBMs do not set drug prices, they do generate discounts and are doing their part to help reduce prescription drug costs for Medicare beneficiaries. These data are an encouraging sign for beneficiaries paying part D deductibles or concerned about their drug costs in the donut hole as well as the overall costs of the Part D program."

The findings are contained in a new report, Medicare Drug Discounts Real & Holding Steady. Among the key findings:

-- PDPs Providing Significant Discounts: PDPs are saving the Medicare program and beneficiaries an average of 35 percent on medications purchased at retail pharmacies and 46 percent on medications purchased through mail-service pharmacies.

-- Real Savings on Brands: Medicare's average savings on brand-name medications ranges from 18 percent at retail pharmacies to 26 percent at mail-service pharmacies.

-- Real Savings on Generics: Medicare's average savings on generic drugs ranges from 52 percent at retail pharmacies to 66 percent at mail-service pharmacies.

-- Dollar Savings on Individual Drugs: Medicare's savings on individual drugs averages nearly $14 at retail and nearly $19 at mail-service pharmacies for a comparable supply.

-- PDP Discounts Holding Steady: Discounts negotiated by Medicare Prescription Drug Plans are essentially unchanged from a similar PCMA survey completed in November 2005.

A PDP's "negotiated price" for a brand-name drug is typically derived by applying a percent discount negotiated by the PBM to the average wholesale price (AWP). Since November 2005, increases in PDP "negotiated prices" for brand-name drugs have closely tracked increases in AWP price inflation from the brand-name drug makers. During this period, both AWP price inflation as well as PDP "negotiated prices" for brand-name products have increased roughly 5 percent.

The full survey is available on PCMA's Web site at http://www.pcmanet.org.

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