The first analysis comparing the Medicare-approved drug discount cards with the current prices for prescription medicines shows savings of at least 10 to 17 percent for brand name drugs and far larger savings for generic drugs compared to the average prices paid by all Americans, including Americans with access to lower drug prices through public and private insurance plans, according to the Centers for Medicare & Medicaid Services.
"All along we expected that the Medicare-approved discount cards would provide beneficiaries with discounts off retail prices for brand-name prescription drugs," said HHS Secretary Tommy G. Thompson. "And now, thanks to the new discounts available through the Medicare-approved cards, we are seeing that seniors can now get significantly better prices than people typically pay - including people with public and private insurance."
The CMS findings reported today show that the 10 to 17 percent savings for name brand drugs off national average retail pharmacy prices (including those paid by people with private insurance, Medicaid and cash-paying customers). In just one month, most of these beneficiaries saved more than the maximum enrollment fee of $30. Savings compared to the average prices paid by Americans for generic drugs are even larger, ranging between 30 and 60 percent. Savings from Medicare-approved discount cards that offer mail order services are nearly 10 to 13 percent lower than certain Internet pharmacies offering similar services. This analysis is based on the best Medicare-approved discount card prices reported by card sponsors on the Price Compare website using randomly selected zip codes to data on national average retail pharmacy prices actually paid by Americans.
"Medicare beneficiaries are above average when it comes to their drug needs, but from now on, they can be below average when it comes to the drug prices they have to pay," said Dr. McClellan. "The new drug card program not only means that beneficiaries are no longer paying the highest prices in the drug store - it means they can get significantly lower prices than are available to many people with insurance coverage. And even greater savings are available to low-income beneficiaries who qualify for the $600 credit this year and next plus additional discounts from many drug manufacturers."
These actual prices paid reflect the fact that Americans with public and private insurance generally get significant discounts off the "list" prices based on the Average Wholesale Price (AWP). Thus, many Americans pay less than AWP for their drugs so that average retail prices are typically less. The drug cards provide discounts of 15 to 20 percent or more off the Average Wholesale Price (AWP) for brand name drugs, and far larger AWP discounts for generic drugs.