New Drug Discount Cards Worry Some NH Pharmacists

listen:

Family Pharmacy is an independent drug store on Route 4 in Enfield.

Its located in a small shopping center.

The store is modest.

But there's enough prescription business to keep 2 owners and 7 employees busy, seven days a week.

sound: cash register, banter, McGee asking question

Ed McGee is one of the owners.

As president of the New Hampshire Independent Pharmacy Association, he also represents non-chain drug stores.

McGee says while the Medicare drug discount plan will offer some help to seniors, it won't provide any incentives to independent pharmacies.
mcgee1 -- if we buy lipitor at 300 dollars a bottle, today, after june first, we're still going to pay 300 dollars a bottle. now any discount is given to the companies that run the private cards. they're the ones making the mone(y) and they're the ones getting that discount.

Dozens of prescription drug cards are available to seniors, from insurance companies, mail order pharmacies, and retail drug stores.

After applying for and paying a fee, eligible seniors will qualify for discounted prescription drugs.

But drug stores large and small are expecting that their prescription profits are going to be squeezed by those discounts.

Mary Ann Wagner is president of The Pharmacy Care Alliance, which represents larger drug store chains.

She says stores like CVS or Brooks expect the additional paper work will increase costs.

But the large chains won't abandon the program.

They want to keep seniors coming in the door.
wagner 4 -- that was our intention. to have a retail pharmacy centric program that will keep people in our stores and more importantly, keep that important relationship with the family pharmacist that they know and trust.

Big chains have enough flexibility to be able to absorb lower profits on some drugs.

But independent pharmacies have less cushion to soften the financial blow some discount cards would require them to take.

In response, many of these smaller stores plan to join together to offer a discount card of their own.

This card, produced by the National Community Pharmacy Association, would allow them to keep more of their profits.

Medicare officials say pharmacists can choose which discount cards they will accept in their stores.

And they shouldn't have to absorb any discounts that seniors get by using the cards.

Tim Trysla is a senior policy advisor at Medicare in Washington, D.C.
trysla 3 i don't think the small margins that the pharmacies are operating are going to be impacted by this because the large price concessions that we're seeing, are largely coming from either deeper negotiations from manufacturers or the general competitive purchasing models that's happening at the pharmacy level.

Independent Pharmacists in New Hampshire disagree wholeheartedly.

They insist the program will force them to offer seniors cheaper prices, without getting lower wholesale prices.

Ed McGee of Family Pharmacy says the discount squeeze is just the latest thing driving down his store's profits.

He says insurance discounts and mail order to Canada have been hurting his business for years.

Now with new discounts reducing profits further, his pharmacy needs to find more customers, or someday face shutting down for good.
mcgee 7 -- ....at this point we're fortunate enough that business is increasing enough and maybe the profit dollars are staying the same even though the percentage is smaller because we're doing more business. but as i said, its pretty finite out here. there's going to come a point when we just can't fill more prescriptions, because there aren't any more to fill.

Medicare officials and pharmacists really can't be sure how the discount cards will affect drug stores.

And Medicare officials aren't really sure how many seniors in New Hampshire will end up using the cards.

The program doesn't go into effect until June 1st.