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Prescription Plan For Medicare Faces Lawsuit

MANAGED CARE August 2001. © MediMedia USA
News and Commentary

Prescription Plan For Medicare Faces Lawsuit

MANAGED CARE August 2001. ©MediMedia USA

President Bush's plan to give prescription discounts to Medicare beneficiaries has created quite a storm. Under the plan, pharmacy benefit managers would administer a discount program for the 25 percent of beneficiaries without drug coverage. People would pay a one-time $25 fee to become eligible for savings of between 10 and 25 percent on prescriptions.

Bush still wants a prescription benefit as part of larger Medicare reforms, but his administration developed the discount plan after his "immediate helping hand" proposal went down in flames in Congress.

The executive order would allow the discount plan to start as early as Nov. 1 without congressional involvement.

The National Community Pharmacists Association and the National Association of Chain Drug Stores immediately filed suit in U.S. District Court, claiming that the plan would benefit only PBMs, is an "unlawful delegation of regulatory power to a private consortium," amounts to price controls, and requires Congress's approval.

Publicly, many Democrats say Bush's plan would be ineffective; privately, they aren't ready to give him an issue they have long fought for. But Bush has many advocates for his program. AdvancePCS, the nation's largest PBM, praises the effort to make drugs more affordable for the elderly — and plans on being actively involved in the development of the drug-card program.