Pharmacy discount cards cause confusion
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So much about health care is changing these days, but at least one thing remains the same -- pharmacy discount cards keep appearing in mailboxes, often whether you asked for them or not.
The latest round comes marked "RXrelief," courtesy of the "Healthcare Alliance" and a company called ScriptRelief. The blue and white discount card has been distributed nationwide throughout 2012, and has been causing some confusion among recipients because the unsolicited cards look a lot like an insurance card or some other type of "official" identification.
Pharmacy discount cards are not insurance -- and most of them make that plain in the fine print -- but with names like MedSaverCard, RxSavingsPlus, YourRxCard, it's no wonder they can cause confusion.
When the cards become too confusing, regulators can step in, as they did in 2008, when then-state Attorney General Tom Corbett ordered Peoples Benefit Services Inc. to stop selling its discount drug cards. His office found the cards resembled government-endorsed products and were "deceptively marketed to replicate government-approved Medicare Part D Prescription Drug Plans."
But on the whole, the cards, which have been around for several years, do more or less as they claim -- offering savings of up to 75 percent on prescription medicine, primarily for those who lack health insurance.
What they don't offer is any reliable or easy way to figure out which discount works best for your particular medication at your particular pharmacy.
"There is no uniform way to compare one card to another," said attorney Edgar Dworsky, head of Massachusetts-based Consumer World, who has studied the cards. "Each one has set up its own type of pricing with a pharmacy benefits manager."
Which means one card might get a better deal on Drug A at Rite Aid, while another gets a better deal on Drug B at CVS. But generally, customers only find that out after using the cards since the pharmacies won't disclose the discount prices and deals they've negotiated with each individual card marketer.
"If your brother-in-law is a pharmacist, then maybe," Mr. Dworsky joked.
Some card issuers offer price-comparison searches on their websites, but these can be unreliable, Mr. Dworsky said, because discounts are shifting from month to month -- or even daily -- depending on sales volume, customer traffic and changes in the retail prices of the drugs.
The cards work the same way AAA discounts work (and, in fact, the automobile association has its own prescription discount card that it markets to members). The company distributing the cards negotiates discounts with participating pharmacies on the promise of increased business and customer flow, just as AAA negotiates discounts with retailers, hotels and restaurants.
The card issuer then takes a cut of that sale in the form of a service fee. Often, companies issuing the cards have nothing to do with medicine or health care, despite names like "Healthcare Alliance" (which is essentially a consumer marketing company).
Why do the pharmacies agree to sell a $100 prescription for $50 when a customer hands over a savings card issued by a marketing firm?
"One, they're still making money," said Rich Sagall, founder of NeedyMeds, one of the many card issuers. His organization is a nonprofit, meaning, he said, that its service charge fees are cheaper than most.
Another reason, he said, is "peer pressure" -- if all of the other pharmacies are part of a particular "discount" network, it's bad business to be the only one that doesn't accept the card.
While the cards achieve their discounts in the same manner, they have different strategies for getting the plastic into consumers' hands. Some, like the RXrelief card, rely on direct mailers. Others team up with cities, states, government agencies or large employers to give the cards an air of "official" government endorsement.
For example, the National Association of Counties -- Allegheny, Armstrong, Beaver, Butler, Washington and Westmoreland counties are all members -- offers residents of member counties access to free discount cards through a partnership with CVS Caremark.
Pennsylvania has its own free discount card available through United Networks of America at www.padrugcard.com.
If the card is tied to a government agency or municipal body, often those municipalities get a cut of the sale, as does the card issuer. For example, the Coast2Coast Rx Card has deals with several cities (Pittsburgh is not among them) giving those cities 50 cents per prescription each time one of its residents uses the free card.
"Free" is key, Dr. Sagall said. Some discount card issuers have tried charging customers for "access" to the network, but with so many free cards available, there's never a reason to pay for one, he said.
In exchange for the discounts, card users should know that many of the issuers are getting to know you and your medical history fairly intimately.
"Marketers can get all sorts of information from the prescriptions, [information] that can be resold," he said. Even if your name appears nowhere on the card, the minute you use the card to buy a prescription, the pharmacy -- and the card issuer -- has your name.
Still, for those who lack insurance -- and discount cards cannot be used on top of insurance -- the benefits outweigh the possible loss of privacy.
"For people with no insurance, it a great deal," Dr. Sagall said.
For those still leery of the cards, there are other ways to find discounts. Many pharmacies and retailers -- CVS to Giant Eagle to Sam's Club to Costco -- have their own pharmacy discount cards or programs.
And if you are in need of a particular brand-name medication but lack insurance (or can't afford it because that particular drug isn't on your insurer's formulary of covered prescriptions), the pharmaceutical companies themselves have "patient assistance programs" that offer free or discounted medicine to the uninsured and those in low-income brackets.
First Published December 9, 2012 12:00 am