Medicare Part D Price War Breeds $2 Generics

Drug prices plunge to new lows as health plans compete for Medicare patients.

Just in time for Medicare's open enrollment period, a new program promises to give plan shoppers bottom dollar deals on out-of-pocket costs.

Although some see the price wars as having positive outcomes for patients—namely, lower drug costs—community pharmacists are concerned about the consequences of reverse price gouging.

UnitedHealth Group Inc. announced their new Pharmacy Saver plan, which will allow Medicare beneficiaries to purchase some generic drugs for as low as $2 at Safeway and Kroger pharmacies. The program's launch coincides with a similar offer made by Humana in partnership with Walmart, which could save patients up to $450 annually, the Wall Street Journal reported.

Under the Pharmacy Saver plan, which begins in January 2011, patients will be able to pay $2 for 30-day supplies of 317 generic drugs at Kroger and 80 drugs at Safeway. UnitedHealth's mail order pharmacies will offer superior deals, with 90-day supplies of some drugs available for $4 and even $2.

"Economic pressures are putting a strain on many people's budgets, including many seniors and other Medicare beneficiaries living on fixed incomes," said Tom Paul, chief executive officer of UnitedHealthcare Medicare and Retirement. "Pharmacy Saver is another example of our promise to provide our members with affordable prescription drugs."

Walmart and Humana's program, introduced in October, was strongly criticized by members of the National Community Pharmacists Association (NCPA), who called it “a prescription for poor pharmacy care.” In a statement, NCPA president Joseph H. Harmison, PharmD, said the incentives punish seniors who choose to patronize their local independent pharmacy.

"The relationships independent pharmacists have with their patients also greatly encourage better patient adherence to their prescribed medication regimen, which can lower overall health care costs," Dr. Harmison said.

For other articles in this issue, see:

  • Travel Season Promises High Volume, Stress for Pharmacists
  • PharmD Student Reinvents Hepatitis Dosing
  • Target Prescription Vials Win Design of the Decade