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Medicare Drug Discount Card Program: How Much Does Card Choice Affect Price Paid?

As a prelude to a voluntary drug benefit that will become available in 2006 under The Medicare Prescription Drug, Improvement and Modernization Act of 2003, the Medicare Drug Discount Card Program was created to offer discounts on prescription drugs to Medicare beneficiaries from June 2004 through December 2005. This AARP Public Policy Institute Issue Paper by Keith Lind describes how prices for 227 individual drugs and several drug combinations vary among 33 national Medicare-approved discount cards, how prices vary among pharmacies under each card, how retail pharmacy prices vary compared with mail order prices, and how some cards consistently offer lower prices than other cards.

In general, the study found that prices of individual drugs varied widely across cards ($5 - $10 differences were common but sometimes exceeded $50 for the same drug), and that Medicare beneficiaries can find lower drug prices through some Medicare cards than they can through others. These findings may have implications for considering whether unlimited options produce meaningful choices for Medicare beneficiaries.

The study also identifies card choice strategies that beneficiaries might use to pay lower prices for their medicines, and describes some limitations of the Medicare Web site and the information it contains about discount cards. (46 pages)

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