Government sites to offer drug price comparisons

Consumer advocates praise Internet listings

April 27, 2004|By Cyril T. Zaneski | Cyril T. Zaneski,SUN STAFF

Two government Web sites will lift the veil this week on the mysteries of prescription drug prices.

Starting today, Maryland Attorney General J. Joseph Curran Jr. will offer price comparisons for the 25 most prescribed medications at 1,200 retail pharmacies at his office's Web site, www.oag.state.md.us.

And the federal Centers for Medicare and Medicaid Services will publish prices of 60,000 drugs at 75,000 pharmacies nationwide at its Web site, www.medicare.gov, on Thursday.

Both are aimed at helping people who have no health insurance save money on their medications.

The savings can be significant. The price for a month's supply of the popular arthritis-pain reliever Celebrex ranges from $167 to $228 at Baltimore city pharmacies. So a person would pay $732 a year more by picking the wrong drug store.

Consumer advocates hail the price lists as a positive step toward controlling rocketing drug spending. After more than a decade of rising at more than double the inflation rates, drug costs are straining budgets. Americans pay the world's highest prices for medicine. They spend more than 10 cents of every health care dollar on drugs, twice what they spent on medicine in 1990.

"Hopefully, the price information will push drug prices out from under the smokescreen," said Dee Mahan, deputy director of health policy for Families USA. "The more information that's out there, the better it is for the consumer."

Although drug prices can vary widely, few customers shop around. That is because retail drug prices are not advertised like other consumer goods and are available only to people who call one pharmacy after another or shop for medicine on the Internet. And many people are unaware of the wide variation in prices.

"We see ads for soft drinks or cars or refrigerators or clothing," Curran said. "For everything else you buy there is ad and there is competition for your money. ... That's where we're coming from, we want competition in the marketplace."

The setting of drug prices is largely a mystery - even to the government and to employers, who pick up a ballooning tab for health insurance benefits. Prices vary widely depending on secret deals cut with drug manufacturers by middlemen known as pharmacy benefit managers on behalf of employers, HMOs and insurance companies.

The secret dealings of pharmacy managers are at the heart of a settlement announced yesterday between the attorneys general for 20 states, including Maryland, and the nation's largest pharmacy benefit manger, Medco Health Solutions, Inc.

Medco agreed to pay $29 million to the states to settle unfair-trade-practices claims. The states allege the company switched patients to medications in order to save itself money but failed to pass on savings to the patients or their health plans. The states allege, moreover, that the switches resulted in increased costs to health plans and patients in follow-up visits to doctors offices. Medco processes prescription claims for 62 million Americans.

Maryland will get $835,000 in the settlement and plans to use it for programs to help low-income, disabled and elderly people get prescription drugs. There will also be reimbursements for individual patients whom Medico switched to the anti-cholesterol drug Zocor and forced to pay for follow-up doctor visits and blood tests, said William D. Gruhn, assistant attorney general for consumer affairs.

The key to the settlement was not the cash, but Medco's promise that it will disclose its financial incentives for switching drugs, reveal the impact of its deals on premiums paid by insurers and co-payments by patients, and give patients the right to refuse such switches. The Medco deal will drive future contracts between pharmacy managers and their clients, including the state and federal governments, Gruhn said.

"The practices that Medco will be employing will be model practices in terms of transparency," Gruhn said. Pharmacy management companies will be the primary administrators of the massive Medicare drug benefit, which begins in January 2006 and is expected to cost more than $530 billion over 10 years.

Curran's consumer affairs staff worked for about a year trying to figure out how to make drug price comparisons available on the Web. People who could benefit most are about 1 million Maryland residents who have no health insurance as well as others whose health benefits require them to pay a percentage of their pharmacy bill.

The state's drug price list is based on information provided by pharmacies seeking reimbursement through the state Medicaid program, said Carolyn Quattrocki, Curran's special assistant. Each pharmacy's Medicaid claim must list the "usual and customary price" for a medicine, which forms the basis for the state price list, she said.

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