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Juliette Cubanski, Richard G. Frank, and Arnold M. Epstein, Savings From Drug Discount Cards: Relief For Medicare Beneficiaries?, Health Affairs Web Exclusive, April 14, 2004 [Abstract] [PDF] [HTML Version] [Reprints & Permissions]

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Are Current Cards A Good Predictor of Future Card Performance?

Ian D. Spatz   ( 14 April 2004 )

Are Current Cards A Good Predictor of Future Card Performance? 14 April 2004
Ian D. Spatz, Vice President, Public Policy Merck & Co., Inc. Send comment to journal: Re: Are Current Cards A Good Predictor of Future Card Performance? spatzi{at}merck.com Ian D. Spatz	The paper on drug discount cards by Juliette Cubanski, Richard G. Frank, and Arnold M. Epstein presents a convincing case that cards can provide real savings to seniors who currently lack drug coverage. Unfortunately, the article attempts to use the experience of seven existing discount cards to project the savings that might come from the new Medicare-endorsed discount cards that will soon become available. There is good reason to believe that the new discount cards will deliver savings that are different – and likely better – than current cards. First, the cards are likely to attract a much larger enrollment than existing programs due to the confidence seniors can have in the government’s sponsorship and approval of the cards. This larger enrollment should increase the leverage of card sponsors in negotiating for price discounts. Second, Medicareb eneficiaries will be limited to enrollment in only one discount card at a time. This should also enable card sponsors to improve their negotiating leverage. Third, Merck has announced that we will be providing discounts on our medicines to card sponsors. We will also provide our medicines free for low-income patients in participating card programs who have exhausted their $600 transitional assistance allowance. These discounts will add to the savings of current discount cards that have been widely criticized as offering too few if any discounts from drug manufacturers and relying too much on discounts from participating pharmacies. These are important differences from existing cards and, at a minimum, the authors should have noted – to paraphrase a common disclaimer in financial ads – that past performance may not be a good predictor of future performance by drug discount cards.