Healthy Skepticism Library item: 1332

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Hallam K.
Medicare Drug Plans Can't Beat Canadian Prices, Retirees Say
Bloomberg News 2003 Jul 8

Full text:

U.S. retirees who buy their drugs from Canada say they already have better prices and more freedom to choose physicians than offered in separate Medicare drug-benefit plans passed by the Senate and House of Representatives in June.

President George W. Bush is urging Congress to compromise on a plan to spend almost $400 billion over 10 years to expand drug coverage and encourage seniors to enroll in health plans managed by private companies such as UnitedHealth Group Inc. Lawmakers returned to Washington this week following the July 4 recess.

A drug benefit that caps payouts at $750 would triple or quadruple out-of-pocket prescription costs for about one in five older Americans, according to a study that will appear in the July 9 issue of the Journal of the American Medical Association. While the House and Senate have proposed drug plans that carry higher caps, seniors said those proposals still can’t compete with cheap Canadian drug prices.

“Mr. Bush can do what Mr. Bush is going to do,’‘ said Rosemary Morgan, a 68-year-old retired social worker in Amherst, Massachusetts, in an interview. “He can do it without me. I’m going to keep going to Canada.’‘

AztraZeneca Plc’s cancer drug Nolvadex, now $1,468 for a year’s supply in U.S. pharmacies, would cost from $900 to $1,300 under the House and Senate proposals, including annual premiums.

Morgan pays her Canadian supplier about $170 for the same drug.

Medicare pays only for prescription drugs when administered by health professionals. The government program’s 40 million members, who are either disabled or age 65 and older, depend on a patchwork of options including the Department of Veterans Affairs, Medicaid and private plans for their prescription drugs.

Seniors lacking drug plans have flocked to Canada, where government-negotiated purchases leave prices for medicines as much as 90 percent below what people pay in the U.S. Morgan said she began ordering Nolvadex from Canada Rx, an Internet drug store, in 2001, after she was diagnosed with breast cancer a second time.

“I have to take the drug for five years,’‘ she said. “I’ll save more than $6,000 by the time my treatment’s done.’‘

Boycotts

Manufacturers such as GlaxoSmithKline Plc have threatened to withhold their drugs from Canadian retailers who mail them to U.S. consumers. Advocacy groups for the elderly, including the New York Statewide Senior Action Council, have urged consumers to boycott Glaxo’s over-the-counter products in protest.

U.S. law forbids residents from buying prescription drugs from overseas retailers. Without Food and Drug Administration oversight, foreign drugs pose “a growing potential danger’‘ to consumers, the agency said in a March letter to Rx Depot Inc, a Lowell, Arkansas company that sells drugs imported from Canada.

Under the Senate bill, seniors would pay a $275 deductible and an average $35 monthly premium. The government would split costs 50-50 with patients for expenses up to $4,500. Then coverage would end until out-of-pocket costs exceeded $3,700. The government then would pay 90 percent of prescription expenses.

In the House measure, citizens would pay a $250 annual deductible and a monthly premium of about $35. Medicare would cover 80 percent of an individual’s prescription drug costs up to $2,000, and patients would pick up the rest. Medicare would step in and pay for drugs after patients spent $3,500 out of pocket.

Savings

Kate Stahl, a retired medical secretary from Shoreview, Minnesota, says she saves about $800 on a $1,800 annual drug bill by buying Pfizer Inc.‘s Norvasc pill for high blood pressure from a Canadian supplier. While the House bill might save her $100 a year, Stahl said she’s concerned that there are no mechanisms to control rising costs.

“The premiums are going to go up as the manufacturers’ prices increase,’‘ the 84-year-old said. “There’s no method of controlling the price Medicare will pay.’‘

The Senate plan would cut Isaac Benezra’s $4,000 drug bill by $900, including premiums, and the House plan would save him $1,500, he said. Either way, Benezra, also of Amherst, said buying from Canada would still save him $1,600 a year.

The proposed Medicare drug plans protect manufacturers, not older consumers, said Benezra, 77, who is membership coordinator for the Massachusetts Senior Action Council, an elderly advocacy group.

‘Opens the Door’

“Nothing in this bill talks about lowering prescription drug prices,’‘ he said in an interview. “This is just opening the door to privatize Medicare.’‘

Seniors would prefer that Medicare administer the drug program itself, rather than forcing people to enroll in health plans that limit physician choice, Morgan said. “I want to be able to choose my physician and go to people I have confidence in,’‘ she said.

Even if the proposed drug programs offered savings over a trip to Canadian drug stores, their effective date of 2006 is too late, said Ellen Greenfield, 71, of South Burlington, Vermont.

“These seniors are going to be dead by then,’‘ the retired banking executive said.