• Drug Discount Cards Off to Slow Start as Prices Float
• Price Hike for Many Rx Drugs Three Times Inflation
• Generic Drugs Marked Up Nearly 2000 Percent
• Increases in Health Plan Premiums May Be Slowing
• Pfizer Agrees to $430 Million Settlement on Improper Marketing
• Glaxosmithkline Agrees To Pay $75 Million To Settle Lawsuit
• Medicare Will Pay 8.4 Percent More to Managed Care Plans
• Lawmakers Call For Quick Senate Vote on Reimportation
• New Bill Would Reduce Social Security’s Windfall Penalty
• Feldman Will Not Seek Reelection as AFT President
• New Jersey Nurses Strike For Safer Staffing Levels
• Dine Out and Save
• Quote of Note: On Increasing Drug Prices and the Medicare Discount Card
• Web site of the Week: http://www.seniordrivers.org

DRUG DISCOUNT CARDS OFF TO SLOW START
AS PRICES FLOAT
Medicare beneficiaries are casting a cold eye on the new Medicare discount drug cards, which took effect June 1. As of early June, HHS secretary Tommy Thompson said that 2.8 million of the 40 million Medicare beneficiaries had applied for the cards. However, some 2.4 million of the cardholders were participants in Medicare HMOs, which signed them up automatically. Cardholders also are finding that prices change from week to week, making it difficult to determine which cards offer the best savings. Prices on all 73 approved cards still are not available. Bonnie Burns of California Health Advocates, a senior advocacy group, termed the changes “distressing because people are going to be locked in to those choices for the rest of the year.” Card sponsors can charge an annual enrollment fee of as much as $30 and are required to offer savings on at least one medication in each of 209 classes of treatments commonly used by Medicare beneficiaries. Medicare officials promise to add a feature to their Web site in a few weeks that will allow beneficiaries to view cheaper options for the brand-name drugs they take. Thompson claims the cards offer discounts of between 11 percent and 18 percent, on average, but critics say that increased drug prices have already eliminated any real discounts. Some seniors have found lower prices through online pharmacies or by purchasing their medications from Canada.

More info: www.Medicare.gov; 1-800/MEDICARE

PRICE HIKE FOR MANY Rx DRUGS THREE TIMES INFLATION
Price increases for brand-name prescription drugs have outpaced the overall rate of inflation in the last several years, eroding possible savings under the new Medicare prescription drug discount cards, according to two new studies released May 25. An AARP Public Policy Institute study examining manufacturers' wholesale prices for 197 drugs commonly prescribed to seniors found an average increase of 27.6 percent from 2000 through 2003, nearly three times the overall rate of inflation during the same period. Researchers also found that manufacturers' price increases accelerated each year of the study, from 4.1 percent in 2000 to 6.9 percent in 2003. A separate study by Families USA examined average wholesale prices for the 30 brand-name drugs most commonly prescribed to seniors, finding that between January 2003 and January 2004, prices increased 6.5 percent, or 4.3 times the consumer price index for all items besides energy. The study also noted price increases for the five top-selling drugs, including Lipitor with an 8.3 percent increase, Plavix with a 7.9 percent increase, Fosamax with a 6.9 percent increase, Norvasc with a 9.9 percent increase and Celebrex with an 8.1 percent increase.

More info: http://research.aarp.org/health/2004_06_drugprices.html,
www.familiesusa.org.

GENERIC DRUGS MARKED UP NEARLY 2000 PERCENT
The Wall Street Journal has found pharmacies are purchasing generic drugs for pennies and marking them up almost 2000 percent. In its review of wholesaler invoices, the newspaper found a 90-day supply of the generic for Prozac cost the pharmacy $4, while its review of the Medicare Web site found one card sponsor offering three 30-day supplies for $84.15. Further research found that the warehouse distributor Costco sold 100 capsules for $14.94. Supporters of the Medicare discount cards claim that beneficiaries will see savings of 30 percent to 60 percent on generic drugs.

INCREASES IN HEALTH PLAN PREMIUMS MAY BE SLOWING
The rate of health insurance premium increases likely will slow this year to about 10 percent, compared with increases of 14 percent to 18 percent in the past several years, but will likely still be more than double the overall inflation rate, the New York Times reports. The slowdown in the rate of increase will provide some relief to employers and employees with health insurance, but the price of healthcare coverage will remain a burden. A number of factors have contributed to the slowdown, such as a decrease in cost of care provided by hospitals and doctors for patients with health insurance in 2003. Last year, fewer patients were hospitalized, and many shied away from more expensive prescription drugs, trends that allowed many health insurers to retain sizable profits, slowing premium hikes in 2004. Lower premium rate increases by Blue Cross and Blue Shield Association plans, which have a combined membership of 90 million people, pressured commercial insurers to rein in their increases. Wall Street analysts also maintain that many health insurers have set hard-to-reach goals for adding members that might be achievable only by offering more attractive prices.

PFIZER AGREES TO $430 MILLION SETTLEMENT ON IMPROPER MARKETING
Federal prosecutors May 13 announced that drug giant Pfizer has agreed to plead guilty to criminal wrongdoing and pay a settlement of $430 million in a whistleblower lawsuit alleging that Parke-Davis, a subsidiary, illegally encouraged doctors to prescribe the epilepsy drug Neurontin to treat conditions other than those approved by the U.S. Food and Drug Administration. The suit charged that Parke-Davis hiked sales of Neurontin for off-label uses by suppressing and manipulating study results. A federal investigation and similar actions by states, both of which resulted from the whistleblower suit, sought to recoup Medicaid expenditures for Neurontin prescriptions that resulted from the allegedly illegal promotional practices. According to court documents, Parke-Davis concealed and misstated clinical information about Neurontin's ability to treat conditions that were not included in its FDA approval and paid physicians millions of dollars to promote Neurontin for off-label uses. About 90 percent of prescriptions for Neurontin—which accounted for $2.7 billion, or 6 percent, of Pfizer’s total revenue last year—were for off-label uses.

GLAXOSMITHKLINE AGREES TO PAY $75 MILLION TO SETTLE LAWSUIT
British pharmaceutical company GlaxoSmithKline (GSK) has agreed to pay $75 million to settle a lawsuit filed by Boston-based Prescription Access Litigation (PAL) over allegations that the company illegally kept less-expensive generic versions of its anti-inflammatory drug Relafen off the market. In the suit, filed in federal court in Boston last year, PAL, which was joined by Alliance for Retired Americans state affiliates in Florida and Pennsylvania, accused GSK of fraudulently obtaining a patent on Relafen by failing to reveal to patent officials that the drug's active ingredient had been previously identified by another group. The lawsuit also alleged that GSK subsequently filed sham suits against three companies that sought to produce generic versions of Relafen, which came on the market in 1992. Under the settlement, GSK will have to place $25 million into a pool from which individual consumers can seek reimbursement for Relafen overcharges. In addition, $50 million will be placed in a pool from which third-party payors such as insurers can seek reimbursement.

MEDICARE WILL PAY 8.4 PERCENT MORE TO MANAGED CARE PLANS
The federal government will pay an average of 8.4 percent more for Medicare beneficiaries enrolled in managed care plans than those in traditional fee-for-service Medicare under the new Medicare law, according to a report released May 27 by the Commonwealth Fund. Under the Medicare law, managed care plans will receive an additional $14 billion, raising the total to $46 billion in payments over the next 10 years. According to the report, the government is paying an average of $552 more for each of the 5 million Medicare beneficiaries enrolled in managed care plans, or a total of $2.75 billion, in 2004. The report is likely to understate the actual subsidy because Medicare beneficiaries who enroll in managed care plans often are healthier than those in fee-for-service Medicare.

LAWMAKERS CALL FOR QUICK SENATE VOTE ON REIMPORTATION
Lawmakers from the U.S. House and Senate last week urged Senate Majority Leader Bill Frist (R-Tenn.) to schedule a vote before the July 4 recess on a bill that would allow U.S. residents to purchase cheaper, U.S.-made prescription drugs from other nations. In the House, 228 members--including 78 Republicans--sent Frist a letter on May 24 asking that he schedule a vote on a comprehensive drug importation bill. In addition, Frist met on May 26 with Sens. John McCain (R-Ariz.), Byron Dorgan (D-N.D.), Edward Kennedy (D-Mass.) and Olympia Snowe (R-Maine), who requested a floor vote soon on a reimportation bill. Last July, the House approved a bill H.R. 4391 that would allow reimportation from 25 industrialized nations. Similar legislation has been introduced in the Senate, including a bipartisan measure that would allow U.S. residents to reimport drugs only from Canada and later from other countries. “Seniors can save between 30 and 40 percent by ordering drugs from Canada,” says AFT associate director of federal legislation Bill Cunningham. “Until we get a real prescription drug bill, the AFT is doing everything we can to bring down the cost of drugs.” Under the bipartisan Senate bill (S. 2328), U.S. residents could reimport as much as a 90-day supply of prescription drugs from FDA-approved Canadian pharmacies for personal use. Licensed pharmacists and prescription drug wholesalers could reimport medications from Canada 90 days after the legislation's enactment. In addition, U.S. residents who travel to Australia, Japan, New Zealand, Switzerland or current European Union nations could return with as much as a 90-day supply of prescription drugs for personal use. After one year, pharmacists and wholesalers could reimport medication from Australia, Japan, New Zealand, Switzerland or European Union nations that were members as of Jan. 1, 2003.

NEW BILL WOULD REDUCE SOCIAL SECURITY’S WINDFALL PENALTY
U.S. Rep. E. Clay Shaw Jr. (R-Fla.), chair of the House Ways and Means Subcommittee on Social Security, and U.S. Reps. Kevin Brady (R-Texas), Sam Johnson (R-Texas), Howard McKeon (R-Calif.), Howard Berman (D-Calif.) and Michael Michaud (D-Maine) are sponsoring a bill that would improve Social Security benefits for public employees and others who paid into a government pension plan in lieu of Social Security. The Public Servants Retirement Protection Act (H.R. 4391) replaces the Windfall Elimination Provision (WEP) with a formula that calculates the Social Security benefit as if all the worker’s earnings were subject to Social Security taxes, using the standard benefit formula. The benefit would be multiplied by the percent of earnings subject to Social Security taxes. Backers of the bill estimate that a worker with an average salary of $30,000 before retiring would receive an additional $1,400 a year in Social Security benefits. Current retirees and workers who have non-Social Security wages in or before the year following enactment would receive the higher of either their benefit under current law or their benefit calculated under this bill.

FELDMAN WILL NOT SEEK REELECTION AS AFT PRESIDENT
AFT president Sandra Feldman has announced that she will not run for reelection at the union's upcoming convention in July. Feldman told AFT leaders of her decision on May 26 during meetings in New York City of the union's program and policy councils and the executive council. In her remarks, Feldman cited a recurrence of breast cancer that requires her to undergo weekly treatments. The travel to fulfill her duties as president, she said, would be a serious impediment to her recovery. "As you can imagine, this is not a decision I came by lightly," she said. "You all know how much the AFT, our members and all those we serve--especially the children--mean to me." Feldman said she's confident the AFT will be "in great hands," praising AFT secretary-treasurer Edward J. McElroy and executive vice president Nat LaCour as "excellent, experienced leaders." Feldman also acknowledged the many letters, cards and e-mails from members and leaders around the country that "continue to sustain me, as does my knowledge that you will continue to fight the good fight." She added: "The job ahead of us is daunting, but as a team, we've always risen to the occasion, and I know we will again now. We're already working hard on the elections, playing a pivotal role in what are crucial races. We are a strong voice in fixing and fully funding ESEA, while not jettisoning standards and accountability--and while we keep helping disadvantaged children as the main focus. We're in the fray on overtime and Medicare, prescription drugs and nurse-patient ratios, and on and on--right where we should be.”

NEW JERSEY NURSES STRIKE FOR SAFER STAFFING LEVELS
The Health Professionals and Allied Employees unit of 425 RNs at Bergen Regional Medical Center went on strike June 2 for safe staffing levels, retirement security and higher salaries. The hospital immediately brought in scab nurses and earlier tried to entice LPNs represented by AFSCME to scab on striking RNs by falsely claiming that the LPN union had agreed to special double time overtime pay schedules in case of a walkout by the nurses. AFSCME quickly repudiated the claim and pledged support of the striking AFT nurses. Settlements with significant gains on the staffing issue and other demands were reached over the last week at five other hospitals represented by the Health Professionals and Allied Employees, an AFT affiliate.

DINE OUT AND SAVE
Save money as you dine at your favorite restaurants this summer. As an AFT retiree, you can dine out and save up to 20 percent on everything you order, including all beverages, food, taxes and tip at over 7,500 restaurants across the country. To start saving, register up to three credit cards with iDine Prime. Then use them to pay the bill at any participating restaurant. Add the tip and sign. Your monthly credit card statement will show 100 percent of your charges--along with a credit of your savings. Call 1-877/491-3463 and mention code AFT7 to sign up and get the special AFT discount rate. Please have your credit card handy when you call.

QUOTE OF NOTE: On increasing drug prices and the Medicare discount card

"It's the functional equivalent of going to a used car salesman and being told you're getting a great deal because you got a $3,000 discount. Only before you came, he raised the price of the car by $4,000."

—Ron Pollack
executive director, Families USA

WEB SITE OF THE WEEK: www.seniordrivers.org

It’s no secret that as we age, certain skills decline. Keep yourself and others safe by evaluating your driving habits on this Web site, and pick up some helpful hints on better driving.

Contributors and sources: Bill Cunningham, Phil Kugler, Shantel Edmonds, Medicare Rights Center, Inside AFT, New York Times, Wall Street Journal, Newsday, Christian Science Monitor, Baltimore Sun, Los Angeles Times, Las Vegas Sun, USA Today, Congress Daily, This Active Life, Kaiser Health Policy Report. Frank Stella, editor; Annette Licitra, copyeditor; Renee Turner, design.