Pfizer will sponsor a Medicare-endorsed discount card in partnership with UnitedHealth Group, the company said April 21.

The "U Share" prescription drug discount card will build on Pfizer's "Share Card" program, which allows low-income seniors to purchase Pfizer products for a flat price of $15 per prescription.

The "U Share Card" will "integrate the expertise and pharmacy network access of UnitedHealth Group with the prescription drug savings model of the Pfizer for Living Share Card, as well as prescription drug savings available through other participating pharmaceutical companies and retail pharmacies," Pfizer said.

Pfizer has been signaling its plans to participate in the Medicare-endorsed card market for several weeks, but had not yet reached an agreement with an approved card provider (¹ Also see "Pfizer Medicare Rx Discount Card Coalition To Employ “Share Card”" - Pink Sheet, 15 March, 2004., p. 15).

The Centers for Medicare & Medicaid Services requires card sponsors to offer discounts on drugs in every therapeutic category, which rules out single-manufacturer cards for Medicare endorsement.

United was one of the sponsors approved by CMS March 26 (² [A#00660130003], p. 6).

Pfizer works with Argus as the administrator on the Share Card. Although Argus received a Medicare-endorsement for its own card plan, Pfizer opted not to work with the company on that program.

Pfizer has been working to build a "coalition of leading health care organizations" to participate in the "U Share" program, but did not announce any agreements April 21.

"We invite companies or organizations committed to quality health care delivery to join the U Share coalition and help us make a difference for Medicare beneficiaries now," Pfizer said.

The company previewed the "U Share" announcement during its first quarter earnings call April 20. The program "won't just be the Pfizer offering," VP Peter Brandt said. "It will be at least one, if not hopefully a couple of other pharmaceutical companies."

Pfizer still hopes to have other manufacturers participating. The most likely is Lilly, which has its own in-house card program that follows the flat price model; the company has already announced its intent to partner with every Medicare-endorsed card plan sponsor (³ Also see "“Together Rx” Will Stand Apart From Medicare Drug Cards; Lilly Plans Role" - Pink Sheet, 26 January, 2004., p. 17).

Several other manufacturers, including Merck, Novartis and - most recently - J&J, have announced plans to provide free products to low-income seniors in coordination with Medicare-endorsed cards.

Another potential "U Share" partner is AARP. UnitedHealth Group is already working with the seniors association on a card plan.

Pfizer believes that it has a competitive advantage in having half-a-million Medicare beneficiaries already enrolled in the Share Card.

The card market will be intensely competitive, Brandt noted. He estimated that there would be more than 100 different cards available, including about 30 national programs.

CMS initially approved 71 card sponsors (some with multiple offerings), but is expected to approve at least a dozen more as part of a "reconsideration process" (see ⁴ Also see "Medicare Rx Discount Plans Proliferate: 36 National Cards Now Approved" - Pink Sheet, 26 April, 2004.).

"I think that the ability to get these into the eligible individuals' hands is going to be the true test," Brandt said. "I think every company that is behind one is gearing up to do rather large efforts to do just that."

The plethora of card choices could lead to confusion in the marketplace as well. Seniors are only allowed to select one Medicare-endorsed plan.

Pfizer's existing relationship with Share Card holders may help the company in that environment.

However, the Medicare rules do not allow Pfizer to convert Share Card enrollees directly to the "U Share" program; the company will have to inform beneficiaries that they have a choice.

For political reasons, it may prove difficult for Pfizer to cut people off from the Share Card benefit even if they choose a competing Medicare card.

Legislators and Bush Administration officials have urged manufacturers to continue their discount and patient assistance programs at least until the full Medicare drug benefit rolls out in 2006.

The pharmaceutical industry is counting on a positive reaction to the card program to help defuse some of the political pressure on drug pricing in the U.S. (⁵ Also see "Rx Industry Will Sell Medicare Bill; Card Launch Will Be First Test" - Pink Sheet, 12 April, 2004., p. 5).

Pfizer CEO Henry McKinnell maintained during the April 21 conference call that the launch of the card program will exceed the expectations of seniors.

"I think the discounts will be far more significant than anybody is expecting," he said. "Into these modest expectations, I think there is going to be a very significant discount benefit here."

The pharmacy benefit management sector and the chain drug sector agree with that assessment.

McKinnell noted that there is a "massive Medicare prescription drug educational campaign under way," which he predicted would help improve seniors' perceptions of the new law - and of the pharmaceutical industry.

"We know from our own research that when seniors understand the benefit, they like it a lot better. So I think you are going to see some good news on the pharmaceutical pricing side here pretty quickly," McKinnell said.

Pfizer’s Coalition Of The Willing: “U Share” Will Be Medicare Card Brand

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