Article: New Medicare plan to cut off free drugs

So much for charity in the upcoming Christmas Season. Mr. Scrooge has company! John, a Proud CORE member

From: "Frank Kaiser" <frank@suddenlysenior.com>
To: <frank@suddenlysenior.com>
Sent: Thursday, November 17, 2005
Subject: [RxNews] New Medicare plan to cut off free drugs - from Suddenly Senior

New Medicare plan to cut off free drugs

By Thomas Ginsberg
Inquirer Staff Writer
Nov. 17, 2005

In an ironic twist, the new Medicare drug program is about to curtail a benefit touted by the pharmaceutical industry and enjoyed by hundreds of thousands of uninsured patients: free medicine.

Under federal rules effective Jan. 1, low-income and elderly patients who enroll in the program, known as Medicare Part D, will lose the ability to get free medications through the drugmakers' tax-deductible charities, known as patient-assistance programs.

Some companies, going further, said this week that they would drop patients who were merely eligible for Part D, whether or not they actually enrolled in it, as allowed under long-standing rules.

As a result, in about six weeks, up to half of the roughly three million to four million charity patients nationwide may lose free access to more than 1,200 brand-name drugs, according to estimates of three companies. Other recipients should be unaffected.

"Our program always has been to provide access for people with no other coverage," said Carla Burigatto, spokeswoman for London-based AstraZeneca P.L.C., which has about 250,000 people in its charity program. "Now they will qualify for a government program."

News of the cut-off followed a ruling last week by the Inspector General of the U.S. Department of Health and Human Services barring companies from giving free drugs to Part D enrollees, hoping to prevent fraud. While suggesting an alternative charity system, the ruling threw a confusing twist into the already-baffling Medicare prescription-drug program.

"The last thing we need is one more variable in a hopelessly complex situation," said Robert M. Hayes, president of the Medicare Rights Center, a New York-based advocacy group. On Tuesday, Americans could begin to sign up for the new voluntary Medicare prescription-drug coverage. About 42 million Medicare recipients are eligible for the program.

Among the Philadelphia-area companies confirming they will drop Medicare-eligible patients Jan. 1 were AstraZeneca and Wyeth Pharmaceuticals. Together, they have at least 226,000 Medicare-eligible charity recipients nationwide.

London-based GlaxoSmithKline P.L.C., which has North American headquarters in Philadelphia and Research Triangle Park, N.C., initially notified Medicare enrollees they could keep their charity benefits. But the company backtracked this week after realizing that it, too, had been confused by the new rules.

"We're going to have to change our position," said a spokeswoman, Patty Seif, adding that she had no further details.

Some patients, however, may get a choice. At least three manufacturers, Pfizer Inc., Bristol-Myers Squibb Co. and Merck & Co. Inc., said they would let low-income and elderly patients keep the private charity as long as they did not sign up for Medicare.

"Nothing will change" for patients who do not enroll, said Laura Hortas of Bristol-Myers Squibb, which gave $500 million worth of drugs to about one million people last year. But "if they sign up for Medicare Part D, they will not be eligible for our program."

Amy Rose, a spokeswoman for New Jersey-based Merck, which has a sprawling operation in Montgomery County, said the company had encouraged senior citizens to join Part D, but would not punish them if they did not. "Our broad interest is making sure that the people who need them have access to their medicines. That's the overall goal of everyone in the industry," Rose said.

Among patients depending on the assistance are at least 6,000 indigent people with HIV or AIDS, according to the advocacy group Title II Community Aids National Network, a coalition including Pennsylvania and New Jersey groups. They have called on federal officials to relax the rule.

Drug companies created patient-assistance programs decades ago, and expanded them in recent years, to help uninsured people get drugs and to defuse anger over high prices - the same complaints that prompted the changes in Medicare in 2003.

Today, the charities are a staple of the industry's public relations campaigns and provide hefty tax deductions. Last year, the industry said the wholesale value of the giveaways was $4.1 billion, a large proportion of which is tax-deductible.

The charities, while costing a small fraction of the industry's $550 billion in worldwide revenue, also may help retain patients who someday could be paying customers again, Hayes said.

Under the Medicare program, the industry was keen on making sure enrollees could keep using their brand-name medications when their expenses hit a gap in coverage - the so-called doughnut hole.

The trade lobby Pharmaceutical Research & Manufacturers of America this week asked federal officials to clarify the ruling to allow such exceptions.

"We had hoped that government policies would preserve companies' options to continue their current patient-assistance programs," said Ken Johnson, a PhRMA senior vice president, "in order to help low-income Medicare beneficiaries further reduce their out-of-pocket costs."