Express Scripts plans to continue its partnership with the National Association of Chain Drug Stores on Medicare-endorsed discount cards into 2005 and beyond, the pharmacy benefit management company said July 29.

"As the Medicare discount card program builds nationally, or if the Medicare discount card program is extended beyond 2005, we are optimistic that we will continue to increase membership," CEO Barrett Toan said during an earnings call.

Express Scripts and NACDS market the Pharmacy Care Alliance prescription drug discount card (¹ Also see "Pharmacy Care Alliance Plans Print, Radio Ads For Medicare Rx Card" - Pink Sheet, 26 April, 2004., p. 23).

Enrollment in the card is going more slowly than expected, Toan acknowledged. "Initial participation in the Medicare discount card program nationwide has been lower than anticipated and as a result the PCA enrollment is below expectations."

Pharmacy Care Alliance has received 160,000 applications and 110,000 have been approved to date, Express Scripts reported. The company estimated that it needs to enroll 250,000 seniors in order to cover the program costs.

Express Scripts is the first participant in the Medicare discount card program to acknowledge publicly that enrollment is not living up to expectations.

The slow uptake was a factor in Express Scripts' decision to revise downward its profit forecasts for the year. The pharmacy benefit manager expects 2004 earnings growth in the range of 20%-22.5%; the company had previously said 20%-25%.

While the Medicare card has not been as successful commercially as Express Scripts hoped, Toan emphasized that it has been successful in saving enrollees money.

"Medicare beneficiaries using the PCA card...saved $2.9 mil.," he said. "If you add the PCA card holders who are eligible to receive the $600 [low income] credit, they received another $3.2 mil."

"It's easy to criticize the PCA card - and lots of people have done it - but $6 mil. in savings in seven weeks for those people is not insignificant. The net value does not go unnoticed by our clients and their members."

The PBM indicated it is still firmly behind the joint venture with NACDS. Toan's reference to the possibility of extending the card program beyond 2005 reflects the continued broad support for the program among card sponsors.

Express Scripts has enrolled another 150,000 seniors in cards it administers on behalf of Medicare Advantage and other client-sponsored plans.

The company's total of 260,000 card plan enrollees is about half Medco's card plan enrollment of 500,000. Medco appears to be the leader in card enrollment thus far (² Also see "Medco Expects Medicare Discount Card Program To Continue Past 2006" - Pink Sheet, 14 June, 2004., p. 14).

Total enrollment in the card program topped 4 mil. as of July 22, Centers for Medicare & Medicaid Services Administrator Mark McClellan reported July 28. Sign-ups continue to increase at a rate of 20,000-25,000 seniors a day. However, it is unlikely that the program will reach CMS' projected participation goal during the first year (³ [A#00660270011], p. 17).

McClellan spoke at a conference held to release a Kaiser Family Foundation report on prices under the discount card program. The report concluded that prices remained stable through June.

"Our analysis of the selected drugs and selected card programs showed that while there were a few changes up and down for selected drugs and cards, overall prices remained pretty stable," the analysis entitled "⁴ Medicare Drug Discount Cards: A Work In Progress" states.

The finding, based on a set basket of 10 drugs commonly prescribed to the Medicare population and seven approved discount cards, is at odds with predictions made by some card supporters that drug prices would be driven lower by market forces.

CMS believes that the price transparency model embodied by the discount card is working, and in the implementing regulations for the Part D outpatient drug benefit scheduled to begin in 2006, the agency proposes to continue its price comparison website.

Express Scripts Will Stick With Medicare Cards, Despite Slow Uptake

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