Health Affairs

Posting date: April 14, 2004

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Health Affairs, 10.1377/hlthaff.w4.198
Copyright © 2004 by Project HOPE

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Savings From Drug Discount Cards: Relief For Medicare Beneficiaries?

Juliette Cubanski ^1*, Richard G. Frank ², Arnold M. Epstein ³

¹ Juliette Cubanski is a doctoral candidate in the Program in Health Policy, Harvard University, in Boston, Massachusetts.
² Richard Frank is the Margaret T. Morris Professor of Health Economics, Harvard Medical School.
³ Arnold Epstein is the John H. Foster Professor of Health Policy and Management, Harvard School of Public Health.

^*Corresponding author.

Abstract

Beginning in mid-2004, Medicare beneficiaries can enroll in prescription drug discount card programs approved by the federal government. We estimate modest savings for beneficiaries without drug coverage from existing drug discount card programs, with average savings of 17.4 percent over current retail prices. Although estimated percentage savings are greater on generics than brand-name drugs, estimated absolute dollar savings are greater for brands. Medicare-approved discount card savings for individual beneficiaries will depend on current out-of-pocket drug spending, the number and types of drugs used, and specific card program features. Aggregate savings estimates vary widely, based on uncertainty in discounts and program participation rates.

Key Words: Access To Care, Consumer Issues, Elderly, Health Reform, Health Spending, Medicare, Pharmaceuticals, Safety-Net Systems

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