Mail order drugs could save U.S. billions

Ordering prescription drugs by mail rather than at a store pharmacy could save the nation’s insurance program for the elderly and disabled up to $86 billion over 10 years, according to new study findings.

The study, released by the Pharmaceutical Care Management Association (PCMA), also found drugs-by-mail are 10 percent cheaper than those bought at retail outlets.

Lower overheard costs, bulk purchasing and fewer dispensing errors help keep mail order prices lower, according to the study conducted by health care research firm The Lewin Group.

A mail-order pharmacy can fill a prescription for about $2.50 compared with about $5 for retail, it said.

PCMA said the difference could help Medicare save money as it implements its controversial new prescription drug benefit for 2006.

Bush administration officials now estimate the benefit, required by law, will cost $724 billion by the year 2014. Earlier estimates said it would cost $400 billion over 10 years.

The rising price tag has sparked an outcry from Democrats and Republicans alike. Some critics want to amend the law to give Medicare officials power to negotiate prices, but U.S. President George W. Bush has said he would veto such a change.

PCMA, which represents pharmaceutical benefit managers who oversee drug plans for employers and other payers, said the study shows one way officials could trim costs, especially for patients with chronic conditions.

“To the degree the mail-service pharmacy option can be more aggressively promoted and accepted, the better off seniors will be and better off the Medicare program will be,” said Mark Merritt, president and CEO for the group.

Elderly with High Blood Pressure, High Cholesterol and other life-long diseases requiring constant medication could save money because mail-order pharmacies allow 90-day prescriptions versus 30 days at most retail outlets, the study said.

Merritt said seniors with chronic disease who do not use mail order now “are unfamiliar with it, don’t understand how it could help them, and don’t know how to access it.” The new findings could help policymakers overcome that barrier, he said.

Under the new benefit, Medicare patients will have the option to get their drugs by mail order or in person.

About 23.6 percent of Medicare beneficiaries will use mail service for their drugs in 2006 - about the number of elderly who use it now, Lewin Group Vice President Jenny Bryant said. Most patients use a retail pharmacy to get started, she added.

Drugs-by-mail also could help other patients save money, the study found. Such prescriptions, which now cut $34.6 billion in private sector health care costs, could save 56.8 billion through 2015 if more chronic and other suitable prescriptions were filled by mail. 

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