While Washington politicians have let Medicare reform slide off the back burner onto the kitchen floor, New York executives have stepped in to mop up the mess. Pfizer, the Manhattan-based pharmaceutical giant, has unveiled a private prescription-drug benefit for low-income seniors. This splendid idea deserves to expand across the drug industry, if federal regulators will allow it.
Unlike the liberal dream of universal, government-run prescription-drug assistance for every American over 65 — presumably including Ross Perot and David Rockefeller — Pfizer’s new Share Card wisely targets those who require the most help. “With limited resources, you obviously focus the program on those with the greatest needs,” Pfizer CEO Hank McKinnell said at a January 15 news conference.
The Share Card will be available to Medicare-enrolled seniors who lack drug coverage and have incomes up to double the poverty line — $18,000 in annual gross income for singles and $24,000 for couples. That population of 7 million seniors will be able to receive a one-month supply of any Pfizer product for $15 per prescription.
According to the Government Accounting Office, Medicare recipients spend $69.54 per drug on average each month, with typical discounts cutting expenditures to $62.94. At those prices, low-income seniors are 15 times less likely than affluent ones to fill their prescriptions. Some poor elderly people purchase a month’s supply of some pharmaceuticals, then cut pills in half to stretch them over 60 days.
Pfizer drugs average $65 per month. Low-income seniors now will get a 77 percent average discount on such treatments as Lipitor (to reduce cholesterol), Glucotrol (for diabetes), and Aricept (for Alzheimer’s). For this population, “these were products that were out of reach due to cost,” said Dr. Valentine Burroughs. M.D. of the National Medical Association. Pharmacies — including CVS and Wal-Mart, two of Pfizer’s partners in this service — will accept the Share Card on March 1. Pfizer also will provide seniors free disease education and referrals to health resources. Information and applications are available at 800-717-6005 or www.pfizerforliving.com.
Pfizer, which twice has paid me speaker’s fees, is doing all this at a financial loss. In fact, McKinnell explained that uncertainty about participation rates makes it impossible to forecast the potential dent in Pfizer’s bottom line. “I don’t doubt that this program in the short term is going to cost us something,” he said, “but, quite frankly, it’s the right thing to do.” McKinnell believes the program will earn “enough support from our investors that it clearly will be seen as a positive for the company.”
This program already has generated bipartisan applause. “The Share Card offers a life-saving benefit,” said Governor John Rowland (R., Connecticut). “It’s immediate prescription help.”
“Pfizer’s taking this action will make it more important that we begin to act in Congress,” said Rep. Edolphus Towns (D., New York). “If we can’t get it done in the Congress, I would say to people around the country: Follow Pfizer.”
In fact, Congress has been paralyzed by a never-ending debate between Democrats who want government-subsidized drugs to cascade like confetti on all Medicare recipients and Republicans who appropriately wish to concentrate relief on the needy elderly. Senator John Breaux (D., Louisiana) and Rep. Bill Thomas (R., California) championed a promising, comprehensive Medicare overhaul that would have given recipients numerous private health coverage options. That plan floundered in 1999 when President Clinton broke his word to Breaux and Thomas and pressured his appointees on a Medicare modernization commission to scuttle the measure.
As Washington’s incessant yapping continues, seniors would profit enormously if Pfizer and other pharmaceutical companies could extend the Share Card industry-wide. Glaxo and Novartis already offer discount cards (rather than Pfizer’s flat-price arrangement). Johnson & Johnson, Merck and other companies might wish to collaborate in an even bigger Share Card. Unfortunately, if pharmaceutical CEOs discussed such an idea, they could be sued by federal antitrust prosecutors.
Instead, the Department of Justice should grant the pharmaceutical industry a “No Action” letter so they may create a private mechanism for more affordable prescription drugs. Too many congressional chefs have spoiled the Medicare broth. DOJ should let Pfizer and its industry colleagues don their reformist aprons and see what they can cook up.