Sept. 15, 2004 -- Officials are acting to increase the transparency of some retail drug prices on Medicare's web site, a move they say will allow seniors to more easily shop for lower cost prescriptions.
The new information will allow seniors using Medicare's drug discount card to compare average prices of drugs used to treat five common chronic conditions, including high blood pressure, high cholesterol, and arthritis pain. Officials say the comparisons are meant to help seniors switch to highly similar but lower cost medicines, including generics.
Many of the most popular drugs among elderly patients belong to classes with many similar drugs. For example, the U.S. market contains as many as 15 different ACE inhibitors for lowering blood pressure.
"The message is that these are drugs that work in a very similar way," says Medicare chief Mark B. McClellan, MD.
Medicare's web site will now compare drugs in the different groups based on average prices paid using any of Medicare's more than 70 privately sponsored prescription discount cards. Three of the groups cover different types of blood pressure-lowering drugs, while two comprise different kinds of allergy medicines.
Officials offer the example of Zocor, a popular "statin" cholesterol-lowering drug. A discounted one-month supply of 20 mg tablets averages $89.38, while two similar competitors, Altoprev and Lescol XL, sell for an average of $57.19 and $63.13, respectively.
Prices for patients without discount cards are different, but officials say the comparisons will still inform them about lower-cost alternatives. Five allergy medications and six drugs for acid reflux are also included in the comparisons.
Until now, Medicare's web site displayed only aggregate monthly prices that seniors could expect to pay with various cards. The increased transparency will drive costs down by encouraging price competition between drug companies, predicts Health and Human Services Secretary Tommy G. Thompson.
"Seniors will be better informed on the alternatives that may be cheaper," he says.
Patients in most cases cannot switch prescription medications without first getting clearance from a physician. The new information is designed to move patients toward lower cost drugs with the help of their doctors, officials say.
Will Costs Go Down?
If successful, stiffer competition and lower retail prices on popular drugs are likely to displease drug manufacturers. Asked how pharmaceutical companies reacted to his decision to post average drug prices on the Internet, Thompson said, "I would say that they would rather we didn't do it."
Pharmaceutical Research and Manufacturers of America, the leading industry lobbying group, issued a statement saying, "We support patients having accurate information about medicines, including the prices they'll pay for them."
Rep. Henry Waxman (D-Calif.) criticized the Medicare move, saying that it did little to lower overall drug prices. Democrats have criticized the new Medicare law for prohibiting the government to negotiate directly with manufacturers for lower prices.
"People already can shop around. They don't need the federal government to help them shop around," he says in an interview.
The move comes as Medicare officials are busy gathering information on which drugs will be covered when Medicare begins paying for a portion of seniors' prescription costs in 2006. Only some drugs in each class are likely to be included on that final list.
Thompson says that he has long favored enhanced price information and that officials are "not trying to move anyone one way or the other" in their prescription drug preferences.