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10/17/2001

Glaxo Offers Drug Discount Card

Kate Traynor

A new program by GlaxoSmithKline could help certain seniors receive discounts on prices for the company’s prescription drugs.

The Orange Card, described by Glaxo as an extension of its patient assistance program, is being offered to elderly Medicare beneficiaries who lack insurance and whose annual income does not exceed 300 percent of the federal poverty level.

Seniors will not pay for their cards, which will become active in January 2002. According to the company, cardholders will receive discounts on all of Glaxo's prescription drugs that are available at participating community pharmacies. The program will be administered through Express Scripts Inc., a pharmacy benefit management company.

"This is an area where we hope that we can provide some leadership and offer a new idea," said Glaxo spokeswoman Mary Anne Rhyne. "Hopefully, it will work and help some seniors get access to some important medicines."

The program was unveiled during an Oct. 3 press conference attended by Health and Human Services Secretary Tommy G. Thompson.

"The Glaxo Orange Card is a dynamic, effective, and very practical way for seniors to receive significant reductions—an average of 30 percent—on outpatient GSK medicines," Thompson said. "In some cases, the savings might be as high as 40 percent."

Rhyne said that the cost of the discount would be borne by Glaxo and would be based on the current wholesale drug price.

"What GlaxoSmithKline is saying is that we’re going to basically take 25 percent off our list price to wholesalers," she said.

When asked for details about the discount, Rhyne said her understanding was that "it works a lot like a store coupon where, I guess, the pharmacists will apply back and get their money back."

S. Lawrence Kocot, senior vice president and general counsel for the National Association of Chain Drug Stores (NACDS), said his organization will give the Orange Card the benefit of the doubt but also watch it closely.

"Glaxo has not talked to us about the program," Kocot said. "We don’t know much about the payment mechanisms. We don’t know much about how this would work."

NACDS was successful this past September in halting, at least temporarily, a Medicare-endorsed prescription-drug discount program proposed by the Bush administration. Unlike the manufacturer-funded Orange Card program, consumers' savings under the Medicare prescription-drug discount card program would have come directly from pharmacies.

"We haven’t seen any card program come along that has delivered what it has promised. And that’s a backdrop for trying to evaluate this one," Kocot said.

"In fairness to [Glaxo]," he added, "I don’t want to cast any dispersions on the program. If they’re going to lay it out there in the marketplace, that’s for my members to decide whether or not this is acceptable or a good program for them and their patients."

Kocot did say he is uncomfortable with Thompson’s enthusiastic public support of the Orange Card program—an enthusiasm like that he displayed when Bush initially announced plans for the Medicare prescription-drug discount program.

"We just think before the imprimatur of Heath and Human Services, and, more specifically, Medicare, is given to any program, there should be specific standards behind it," Kocot said. "In other words, no one really judged whether this was a good program, whether it will provide effective discounts, whether it really is anything more than a brand-name promotion."

Kocot added: "There’s a lot of questions we have about the process the government is using to jump behind these private-sector programs."