More states create retail drug plan enrollment

October 9, 2006

When Gov. Jon Corzine recently signed the New Jersey Prescription Drug Retail Price Registry bill into law, he hailed it as a "significant step toward making health care more affordable." The law creates a database of prices for the 150 most common prescription drugs. Consumers will be able to access the database via a toll-free telephone number or search it on-line. Despite the Governor's optimism, however, many pharmacists doubt the law will have much impact on either pharmacists or consumers.

In passing the legislation, New Jersey joins a vanguard of states that are implementing prescription drug comparison Web sites. Michigan has a Web site, operated by its Department of Community Health, which compares the prices of the top 30 prescription drugs. The attorneys general of Maryland and New York have also created Web sites, but participation is not mandatory. New York Gov. George Pataki recently vetoed legislation similar to that passed in New Jersey, which would have made participation mandatory. The New Jersey law is not scheduled to take effect until September 2007, though advocates say they will press to get the site up sooner.

Fortunately for N.J. pharmacists, compliance with the new state law will be easy. Prices for the 150 medications will be taken from the usual-and-customary prices that pharmacies are already reporting to the state Medicaid board. The only step pharmacists will have to take is to display a poster advertising the Web site and phone number. The New Jersey Department of Health & Senior Services will maintain the Web site and will be responsible for updating the information.

While the price differences can be significant, it is less clear how many patients will benefit from the Web site. Nationally, the U.S. Census Bureau reports that some 46 million people are without any insurance at all. Medicare Part D coverage has significantly reduced the number of seniors without prescription drug coverage. According to a Kaiser Family Foundation study, 51% of people without prescription insurance either reduced the number of pills they took or did not fill prescriptions at all. "For the vast majority of customers, prices are set by the health plans," explained Joe Roney, CEO of the New Jersey Pharmacists Association. He estimated that as few as 4% to 5% of customers currently pay cash for their Rx drugs.

Some advocates hope the ability to shop around will help Medicare Part D recipients as they hit the "donut hole" gap in coverage. Many of the plans do not cover prescription drug expenses after patients have $2,250 true out-of-pocket (TrOOP) expenses and before the catastrophic coverage kicks in at $3,600. "This will help those in the donut hole," argued Sy Larson, president of the New Jersey State AARP Office. "When patients reach the donut hole, they can shop around."

Shopping around, however, may not actually save consumers much money. According to Jocelyne Watrous, Medicare beneficiary consultant at the Center for Medicare Advocacy, most Medicare Part D recipients are better off staying with a network pharmacy for their Part D insurance plan. "In most cases, the plan's negotiated price will be lower than the retail price," she explained.

Pharmacists also express concern over potential drug interaction problems if patients shop around. "It sends the wrong message to the public," Roney said. "It is not good public policy and even worse health policy. It encourages people to shop around, and no single pharmacy will have all their drug records. No one will be able to catch serious drug interactions problems. That's not good for the public."

Despite the concern, it remains unclear whether the sites will get much traffic. Craig Burridge, executive director of the Pharmacists Society of the State of New York, reported that he is unaware of any pharmacies that have lost, or gained, any business from the Attorney General's Web site.