Discount prescription drug card providers compete for partnerships with counties [York Daily Record, Pa.]By Ed Mahon, York Daily Record, Pa.McClatchy-Tribune Information Services
July 29--YORK, Pa. --
York County residents in the first five months of the year saved more than $720,000 by using a free discount prescription drug card when they purchased items from pharmacies, according to county documents.
And during that same time period, the company that manages the program sent about $15,000 from those sales to county government for being a partner.
"The royalties are the least of the deal. Our interest was benefiting county residents," said York County Commissioner Chris Reilly "And I think the royalties are just sort of an ... icing on the cake."
That icing on the cake is a small percent of the county's budget -- which is $450.5 million overall for 2012, including a general fund of $178.5 million.
But it's part of a national competition between companies seeking to partner with counties.
Financial Marketing Concepts -- which administers the Coast2Coast Rx program that York County participates in -- wants people to use its free discount cards when they pick up prescriptions at the pharmacy, because the company will get a small percentage of the sales.
The cards aren't health insurance, but they can offer discounts for people without insurance or with coverage gaps.
Savings vary, and not all prescriptions are cheaper with the card. But York County says users have saved about 54 percent off the normal retail price since the program was launched here.
Martin Dettelbach, chief marketing officer for Financial Marketing Concepts, said their pharmacy benefit manager, WellDyneRx, has negotiated discounted rates with more than 59,000 pharmacies throughout the country for the program.
And his company has an agreement where it receives between 70 and 75 cents each time a customer receives a discount through the card. At the same time, York County receives $1.25 for each purchase that qualifies. And Dettelbach said that eight out of 10 times, the price with the discount card is cheaper than what the pharmacy already offers -- and the customer always pays the lower price.
So what do the pharmacies get out of the deal?
"What they're looking to do is give up profit margin to drive the people in, because ... they know that they're going to buy other products in there," Dettelbach said.
And Dettelbach said his company seeks to partner with counties like York "because of the legitimacy that an endorsement from the county gives. ...You don't get the impact working with groups and organizations that you do with counties."
Dettelbach said they also partner with some cities and townships.
'Almost ... too good to be true'
In York County, commissioners approved participating in the program in May 2009.
"It was almost like it was too good to be true when they first introduced it," said York County President Commissioner Steve Chronister.
But he and other commissioners said the Coast2Coast program has turned out to be a great benefit.
The county released figures earlier this month, saying York County residents saved more than $3.5 million by participating in the prescription drug card program since 2009.
And savings within the past year increased by about $1.6 million according to the figures from the end of June, the county said. The number of people using the program increased by 2,244 during the same span, according to the county.
"The savings are up an unbelievable amount," said York County Commissioner Doug Hoke. "It obviously must be working, and the residents like it, or we wouldn't have that kind of reaction."
Chronister said the royalties, while a small percentage of the county's overall budget, benefit all county residents. He said the funds aren't earmarked for a specific area.
"If it goes into the general fund, it saves them money on that side, as well," said Chronister. "...We are passing it on."
'We wanted to give back.'
When Financial Marketing Concepts and York County first entered into a contract in 2009, the company offered 50 cents for each qualified purchase with the card.
In 2011, it increased that payment to $1.25.
"We always had paid a royalty to counties, because we appreciated their endorsement. And we wanted to give back," said Dettelbach.
His company competes with prescription drug card providers in several other areas: who can offer the most discounts; who can offer deals at the most pharmacies, or the most services; and who can provide the best assistance to counties in promoting the program.
But the payment to counties -- called a "royalty" by some and a "marketing reimbursement fee" by others -- are part of that competition.
Andrew Goldschmidt, director of membership marketing for the National Association of Counties, said they looked at multiple options before deciding several years ago to partner with the company that's now known as CVS Caremark to offer a discount prescription drug card program to participating counties for their residents.
At the start of the year, the association and CVS Caremark gave counties the chance to choose an option that included a $1 payment when the card gives the best price on a transaction -- although the association says that residents in counties that don't choose that option can average 2 to 2.5 percent more in savings when they shop.
"Other competing programs were providing a revenue option to the counties. So we wanted to be able to offer that as an option," said Goldschmidt.
CVS Caremark receives a payment from each qualified purchase. And he said the association also receives about 10 cents for each qualified transaction. His association calls the payment for counties a "marketing reimbursement fee" to compensate them for the time staff spend on the program. He said they wanted counties "to have some resources to be able to market and promote the program," or to provide needed services.
Goldschmidt said of the more than 1,400 counties in the program nationwide, about 50 have taken the fee option so far.
Currently, more counties partner with the association and CVS Caremark's program than with the Coast2Coast Rx program. Goldschmidt said more than 1,400 counties are participating nationwide, or about 46 percent of all counties in the country. And the national county association website lists more than 45 participating counties in Pennsylvania.
"We are making great inroads," Dettelbach said. "And we feel that another six to 10 (counties) will come on board with us by the end of the year."
Who can participate?
There are no income, age or health status restrictions.
The discount prescription drug card is primarily intended for people without health insurance, but the county says in some cases it may offer better pricing than some health insurance plans.
The card can also be used by people with high deductibles, health savings accounts or to save money on prescription drugs that aren't covered by their health insurance plans, the county says. And the county says it can be used by Medicare Part D participants who don't have supplemental insurance during the "donut hole" gap in coverage.
The card can also be used on pet medication.
The county says that more than 59,000 pharmacies, including all major chains and most independent pharmacies, accept the card. Pharmacies that accept the card include ones at CVS, Walmart and Weis Markets, according to the company that manages the program.
How do I get a card?
The county says there is no cost or paperwork required.
People can pick up one of the Coast2Coast Rx cards at many county offices, library locations and most chain and independent pharmacies, according to the county. It can also be downloaded online at www.coast2coastrx.com/yorkpa.
The website also contains information about chains that accept the card.
By the numbers
Royalty payments Financial Marketing Concepts has paid to York County:
--- $4,237 in 2009 (Commissioners approved participating in the free discount prescription drug card program in May of that year.)
--- $13,476.50 in 2010
--- $34,312 in 2011
--- $15,288.75 in 2012
--- $3.51 million -- how much York County residents have saved since the program was launched in 2009.
--- 7,843 -- number of people who have used the program in York County.
--- 114,740 -- number of prescriptions filled since the program began for York County.
--- About 54 percent -- average savings off normal retail price in York County.
Source: York County.
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