State delays discount drug program

By ANDREW WELSH-HUGGINS, AP Statehouse Correspondent

COLUMBUS, Ohio (AP) - The state is delaying the start of its prescription discount program for at least six weeks while it tries to persuade more pharmacies to participate.

Both CVS and Rite Aid, the state's two largest pharmacy chains, have declined to join, concerned about fees and lack of control over setting discounts.

The state had planned to start the expanded version of its Golden Buckeye card later this month but has enrolled only about 65 percent of pharmacies, said Steve Proctor, a Department of Aging spokesman. Its goal is at least 90 percent.

"It's a bigger undertaking than we imagined and it's taken a little bit more time," Proctor said.

The program will provide prescription drug discounts to all senior citizens and disabled at participating pharmacies. It is offered through the state's 27-year-old Golden Buckeye Card, which also already provides the elderly and disabled discounts at more than 23,000 participating businesses.

The state says discounts will range from 13 percent to 21 percent on name-brand prescription drugs and 23 percent to 43 percent on generic and mail-ordered drugs.

Rite Aid doesn't like the fact that a third party sets the discounts that pharmacies must provide, spokeswoman Jody Cook said Thursday. In the past, pharmacies could voluntarily offer their own discounts.

The state has hired MemberHealth of suburban Cleveland to run the program, including setting the discounts.

Rite Aid also doesn't like the fact that the card is available to all seniors, with no way of measuring their financial neediness, Cook said. Rite Aid offers its own 10 percent discount to senior citizens paying cash for prescriptions. The company has about 237 pharmacies in Ohio.

CVS doesn't like the 75-cent fee it must pay to MemberHealth, said spokesman Todd Andrews. The company, with more than 300 stores in Ohio, also has its own discount card.

"We feel that program offers seniors considerable benefit," Andrews said.

Wal-Mart, with 98 pharmacies in its Ohio stores, is still negotiating with the state and MemberHealth, spokeswoman Cynthia Illick said.

Walgreens, with 121 pharmacies, and Kroger, with 182, will participate.

Proctor said the state is negotiating with a couple of chains but he wouldn't identify them.

Pharmacies collect a $3.50 transaction fee for each prescription filled for a Golden Buckeye cardholder. Of that, 75 cents goes to MemberHealth. Pharmacies also can receive 5 percent of any rebate offered by a drug maker.

"We hope as it gains in popularity and people start to benefit from the discount, Ohio's 2 million seniors will encourage pharmacies to participate," Proctor said.

Many pharmacies are concerned that the transaction fee won't cover the cost of the discount they're required to offer, said Ernie Boyd, executive director of the Ohio Pharmacists Association.

"We always have felt it's a form of price fixing by the government, which doesn't hit at the problem, which is what manufacturers charge our pharmacies for the drugs," Boyd said.

Erica Ragaji said she is reluctantly offering the discount at her independent pharmacy on the west side of Columbus in the low-income neighborhood called the Bottoms. She is concerned her pharmacy will lose money on the discounts.

"We need to help people who don't have the means who get prescriptions on their own," Ragaji said. "We're not going to leave these people out to dry -- we're accepting it, but we're just also very worried about how it's ultimately going to turn out."

(Copyright 2003 by The Associated Press. All Rights Reserved.)