Drug card seen as ‘win-win’ for all
A prescription drug discount card newly arrived in LincolnCounty operates on a tight business cycle formulated to make sureno one loses while everyone – to some degree – wins.
A joint venture between pharmacy services provider CVS Caremarkand county government group National Association of Counties, thediscount card works by offering a little something for everyone onthe pharmaceutical chain – from consumers to drug stores tomanufacturers – without forcing any one party to pay the lion’sshare. Consumers get discounts on needed medication, pharmacies getmore customers and the provider enjoys a small kickback every timethe card is used, said NACo Membership Marketing Director AndrewGoldschmidt, who helped develop the program and launch it in2005.
“It’s really a win-win for all,” he said. “Pharmacies get morebusiness, the manufacturers are helped with their distributionnetwork and the provider makes a small transaction fee each timethe card gives the best price.”
The discount cards are being distributed by county supervisorsand can be picked up at the Lincoln County Chancery Clerk’s Officeand the Brookhaven-Lincoln County Chamber of Commerce. The cardsare available for every Lincoln County resident, regardless ofexisting insurance coverage or medical condition, and require noenrollment, fee or paperwork of any kind. The card can saveconsumers up to 20 percent on prescription medication.
Those with insurance can still use the card, although theircurrent drug coverage more often than not may trump the savings itoffers, Goldschmidt said.
The card will come in handy for drugs not covered by insuranceplans, and will especially benefit those with no insurancecoverage. Discounts already in place at participating pharmaciesmay also trump the card’s savings, but Goldschmidt said the cardhas a 75 percent success rate.
The cards are run electronically at the pharmacy. Discounts willvary from drug to drug.
Since the card hit local streets earlier this week, questionshave arisen about how it works – mainly, who pays the tab for thediscounts.
It’s not local taxpayers.
Goldschmidt said Lincoln County’s membership fee for NACo is$681 per year, much cheaper than many other government groups, andNACo does not profit from the discount program. The cards areavailable as a service to NACo’s 1,300 member counties.
Since the program was implemented, the discount cards havehelped fill 23 million prescriptions and saved $275 million, hesaid.
CVS Caremark isn’t paying for the discounts, either.
In fact, the company receives a transaction fee – usually around$1, Goldschmidt said – every time a discount card is used. Thereare approximately 59,000 pharmacies contracted with CVSCaremark.
If any group is paying for the discounts, it appears to be thepharmacies, aided by increased customer traffic due to the card’sappeal. The program is optional and pharmacies may opt out,Goldschmidt said.
“They are trying to increase their business,” he said of thepharmacies. “You’d rather have people coming through the door andgetting a discount than not coming through the door at all. Andkeep in mind everything in retail has markups.”
Bane Drugs pharmacist Kelly Boutwell said the worst-casescenario for a pharmacy is that it would have to sell drugs atcost, though the likelihood of that happening often is rare. Hesaid CVS Caremark reimburses pharmacies for the discount provided,though reimbursements vary from full price to not too much.
“If we submit our regular price and (the discount) for that drugis $10 less, you might get that much back, but you might not getbut a dollar back,” Boutwell said. “If (the regular price) was $50and (the discount price) comes back $40, and the cost of themedicine is $38, you wouldn’t make but $2. It’s going to vary fromdrug to drug.”
Boutwell said the discount card is a good thing for everyone tocarry, though he cautioned card users not to be misled. Noteveryone will save 20 percent every time, he said.
“By the time you key it in, it might only be a couple of bucks,”Boutwell said. “We don’t actually calculate any price. You just putit in the computer and shoot it to them. It’s discounted accordingto whatever their contracted price is for a particular drug. It’skind of a crapshoot.”
Still, the cards are available for everyone, and everyone shouldget one, Boutwell said. The cards are still going into circulationin Lincoln County, and so far one person has used one at BaneDrugs, saving $6 on a $12 prescription, he said.
“I’m not looking at it making us go in the hole or anything, andif it saves people some money, that’s good,” Boutwell said.