Report to the President: Prescription Drug Coverage, Spending, Utilization, and Prices.. Other Sources of Drug Coverage

04/01/2000

Some Medicare beneficiaries and non-Medicare individuals receive a degree of assistance in purchasing drugs through other federal and state programs. The most important is the Department of Veterans Affairs (VA). When a VA physician prescribes a drug, a veteran may fill the prescription at a VA pharmacy, or through a VA mail- order program, usually with only a small copayment. Eligibility for VA services thus functions as the equivalent of insurance, but only for prescriptions written by a VA physician. Medicare generally does not cover VA services, so a veteran may have to pay for the physician visit to access the drug benefit. However, visits are free for the indigent and for veterans with service-related conditions.

Currently, 16 states operate pharmacy assistance programs, which cover about 750,000 individuals.32 These programs generally cover low-income elderly people who do not qualify for Medicaid drug coverage; about half are available to other population groups, typically the disabled.33 Some of the programs cover the same range of drugs covered under the state’s Medicaid program. Others are restricted to “maintenance” drugs required for certain chronic conditions.

A very small number of Medicare beneficiaries are assisted in drug purchases by Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), worker’s compensation, or other coverage sources.

Some people without insurance may receive certain drugs for free. Some manufacturers operate programs that make certain drugs available to uninsured people meeting specified eligibility criteria. The Pharmaceutical Research and Manufacturers of America (PhRMA) estimates that the programs for which they have data filled 2.7 million prescriptions for nearly 1.5 million people in 1998.34 In addition, manufacturers commonly distribute samples to be dispensed by physicians and clinics. IMS Health reports that for the twelve months ending September 1999, companies gave drug samples with a retail value of about 7 billion dollars to office-based physicians.35

Other individuals without coverage may purchase discount cards from groups like AARP which enable them to receive a percentage discount for prescriptions purchased in participating pharmacies. Many pharmacies also offer discounts to seniors. Discounts of this type are not classified as drug coverage. There is no centralized source for data on the number of people taking advantage of these discounts or the value of the discounts they receive.

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