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Local pharmacy discount card has pros, cons

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By Cynthia McCloud
For The State Journal

A discount card sponsored by the city of Clarksburg may save West Virginians a few dollars on prescription drugs, but some say it hurts the bottom line of independent pharmacists who aren't reimbursed for the markdowns.

Clarksburg was among the first cities in the nation to promote the Prescription Drug Discount Card, administered by the pharmacy benefit manager CVS Caremark, when the card came out in 2008.

Today, according to Clarksburg City Manager Martin Howe, 638 cities are participating through their affiliations with the National League of Cities. About 50 pharmacies within a 20-mile radius of Clarksburg are set up to accept the card, he said.

"Pharmacies are not reimbursed for the discounts," Howe said. "They voluntarily agree to participate in the discount card program because they recognize the value that the program brings in terms of customer loyalty and increased traffic in the store where consumers often buy other products when using the discount card. Many small pharmacies believe it enables them to compete with the national chain stores.

"In addition, persons using the discount card represent only a small percentage of a pharmacy's prescription business (approximately 15 percent)," he said. "Most prescriptions are filled under an insurance plan where the pharmacy and the insurance provider have negotiated a discount price (after the consumer pays a small co-pay)."

Saving thousands of dollars

The cards are free to obtain — they can even be printed from the city's website, www.cityofclarksburgwv.com. A person does not have to be a Clarksburg resident to get and use the card.

They are intended for people who do not have insurance or whose pharmaceutical plans don't cover certain prescriptions, such as lifestyle drugs for hair restoration and contraceptives. It can also be used to purchase pet medications, Howe said.

The card keeps someone from paying the full retail price of a medication. The NLC says the discount can be as much as 75 percent.

"The average savings is 20-25 percent, depending on the type of drug you're buying," Howe said. 

Clarksburg is ranked second in the nation — behind Detroit — for dollars saved on the program, Howe said.

"Since Clarksburg began this program in December 2008 more than 40,000 prescriptions have been filled with a 34 percent in average savings," Howe wrote in a report on the program to Clarksburg City Council earlier this fall. "The total 9,910 users have saved $617,518.61 by participating in the Prescription Discount Card Program."

As of Sept. 30, the cards had been used this year by 744 people filling 2,992 prescriptions with a savings of $62,070.57, Howe said.

There are more than 65,000 retail chains and pharmacies nationwide that accept the card, he said. 

Some of those pharmacies do so grudgingly, according to an independent pharmacist in Harrison County who objects to the cards. The pharmacist refused to be quoted and referred questions to Pharmacists United for Truth and Transparency. PUTT is a nonprofit group of independent pharmacists that formed three years ago to educate the public about the ways PBMs manipulate prices, such as mail-order services, spread pricing markups and rebate retention. 

‘A bad deal for the consumer'

PUTT President Jason Wallace is an independent pharmacist who owns a group of stores in Kentucky.

Wallace spoke about prescription drug discount cards in general and didn't mention a specific one. 

"Discount cards, in general, are a bad deal for the consumer in a number of ways," Wallace said. "An independent pharmacist's internal store pricing structure is probably better than the discount card can provide."

The cash-paying customer presenting a discount card agrees to pay the entire cost, less any discount. 

For example, the independent pharmacist's price on a popular cholesterol drug is $25 for a 90-day supply, which may be cheaper if the customer paid cash without showing the card.

The card issuers do not reimburse pharmacists for the discounts. And worse, "the really egregious cards charge us a fee on the back end to process the claim," Wallace said. 

The PBM gets a rebate when the card is used. But the only benefit to Clarksburg is goodwill, Howe said.

Shared personal information

Howe said there are no enrollment forms, so no personal information is collected in exchange for the card, but Wallace said a cardholder's personal information is shared when the pharmacy processes the claim.

He said a consumer should question why the cards are free.

"What's in it for the card processor is they now know your full name, date of birth, Social Security number, allergies, all the medications you're taking. They know your phone number and email address if that's loaded into the system," Wallace said. "They take that information and sell it to third-party buyers."

Those buyers then contact customers to sell them other products.

Howe disagreed.

"Caremark does not collect personal information beyond what is lawful under HIPAA and does not use any information to contact consumers or in any other way," he said. "Caremark, as a prescription benefit manager for many large insurance companies, does contact consumers, but again this does not apply to Caremark as the administrator of the discount card program. 

"In the five years of the program, NLC has not received any formal complaints from any pharmacy anywhere in the country. In the few cases where pharmacies have questioned the program, their questions were resolved to their satisfaction."