AARP, Pharmacists Continue to Support New Medicare Drug Benefit

Published February 1, 2006

The new Medicare drug benefit has been widely described in terms of “problems,” “woes,” “glitches,” “growing pains,” and “chaos”–all within the first two weeks of 2006.

But the American Association of Retired Persons (AARP) and a state pharmacy association have given the benefit’s initial debut a positive review.

Prices Praised

“People who have been buying low-cost prescription drugs from Canada could be in for a big surprise,” Patricia Barry reported in the January issue of AARP’s Bulletin. “Many who choose the least expensive Medicare drug plan in their area that covers all their drugs could pay less this year than getting those same drugs from Canada.”

The AARP investigation of drug prices, titled “The New Math: Cheaper than Canada? The drug benefit may be the better deal,” calculates “all out-of-pocket costs under a Medicare plan through 2006, including premiums, deductibles, and payments for drugs.”

Brand-name drugs are often priced lower in Canada than in the United States. “But Medicare drug coverage is insurance, so enrollees are charged copayments instead of full price,” notes the study. AARP found private plans “have been scrambling to win over customers with good deals for 2006. Many have eliminated deductibles and some offer full coverage in the [Medicare drug coverage] gap.”

The “unexpected results” of the AARP study “do not apply to everybody,” Barry writes, “but are widespread enough to underscore the importance of carefully doing the math–especially looking at the copays when choosing among Medicare plans or comparing them with the cost of drugs from Canada.”

According to Barry, “All the people for whom we ran the numbers in December, before Medicare drug coverage took effect on Jan. 1, and who currently buy drugs from Canada, said they would probably sign up with a Medicare plan before the May 15 deadline, mostly for insurance protection against high costs in future.”

At the same time, AARP reported, seniors reported being skeptical about the information they are receiving from Medicare and the drug plan sponsors. Fluctuating prices, errors, and contradictory details given in the early weeks of the sign-up period increased their distrust of a program they already found confusing.

Safety from Counterfeits

The Missouri Pharmacy Association (MPA) seconded AARP’s approval of the Medicare benefit, stressing drug safety over cost. The group stated in a news release, “Seniors should not only consider the costs associated with their prescription drugs, but also the source of their medicines and if they are indeed safe.”

Under Medicare, community pharmacists are available to assure seniors the drugs they receive meet all necessary state and federal requirements.

The MPA statement highlights a U.S. Food and Drug Administration (FDA) sting operation, conducted at several major airports in August 2005, that revealed nearly half of the imported drugs intercepted from four countries were shipped to fill orders consumers believed they were placing with “Canadian” pharmacies. Eighty-five percent of the drugs promoted as “Canadian” came from 27 countries around the globe. Many of the drugs were found to be counterfeit.

“As the recent findings from AARP conclude,” said Ron Fitzwater, chief executive officer of the MPA, in the release, “seniors no longer have to take unnecessary safety risks by importing drugs from potentially dangerous foreign sources in an attempt to save money on their prescription drugs.”

Fitzwater noted Medicare offers safe, efficient, and affordable drugs, and he encouraged seniors to review their options and choose a plan that best fits their needs. “The AARP investigation and the FDA sting provide further evidence that the new Medicare drug benefit, not drug importation, is the answer to lower drug prices for America’s seniors,” Fitzwater said.

Better Off with Medicare

“It’s important to remember that the AARP did support enactment of the drug benefit amidst much criticism from its liberal friends,” said Galen Institute President Grace-Marie Turner, writing on the Galen Web site in January. “And it does offer Medicare drug plans in partnership with UnitedHealth. So they do have a bias.”

The AARP study used a variety of examples, Turner notes, from plans with low monthly premiums, a $250 deductible, and no coverage in the Medicare coverage gap, to those with higher premiums, no deductibles, and full coverage in the gap. In all but one instance, seniors did better with the Medicare plan than with drugs imported from Canada.

Moreover, “the AARP study didn’t include seniors with low incomes and those who have selected integrated Medicare Advantage plans,” Turner notes, both of whom would do better under their Medicare plans than with Canadian imports.

“Nearly all [AARP] interviewees would be better off financially, by varying amounts, under a Medicare plan, with those using the most drugs potentially reaping the greatest savings over the year,” Turner noted.

Susan Konig ([email protected]) is managing editor of Health Care News.

For more information …

The AARP report, “The New Math:Cheaper than Canada? The drug benefit may be the better deal,” is available online at