Walgreen Co. may join the parade of pharmacies and drug benefit managers expected to provide drug cards for seniors under the recently approved Medicare drug benefit.
Walgreens Chief Executive David Bernauer said the company is weighing the possibility of applying to the federal government for a discount card.
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“We most likely will have a card of our own,” Bernauer said in a recent interview.
It would seem only natural that Walgreens would want to stamp its brand on a drug card potentially used by millions of seniors under a drug benefit provided under Medicare, the federal health insurance for the elderly and disabled.
After all, prescription drug sales accounted for 62 percent of Walgreens’ fiscal 2003 sales, a large and growing part of the company’s revenues. Prescription drug sales represented 60 percent of sales in fiscal 2002.
But drugstores overall have been less than enthusiastic about past proposals for discount cards for Medicare beneficiaries, and pharmacies remain skeptical about how the new benefit will work. Pharmacies anxiously await regulations from the Centers for Medicare & Medicaid Services.
“Now, over the next 18 months or so, it’s up to the bureaucrats to decide what the legislators really meant,” Bernauer told shareholders during the company’s annual meeting last week at Navy Pier. “Rest assured, Walgreens will be a major participant as all this is sorted out.”
Under the Medicare drug benefit signed into law by President Bush in December, discount drug cards are expected to be available for seniors by June, providing discounts of about 10 percent to 25 percent. The drug discount cards are designed to be a bridge until the new Medicare drug benefit begins in 2006.
But Bernauer said there are still some regulations that need to be worked out with Medicare officials, although he wasn’t specific.
In the past, Walgreens and other drugstores opposed discount cards for Medicare patients because they didn’t want the pharmacies subsidizing the benefit.
Walgreens may also participate in an alliance formed last week between the National Association of Chain Drug Stores and Express Scripts Inc., a St. Louis-based pharmacy benefit management company.
The association, which includes Walgreens as a member, and Express Scripts were the first to seek permission to have a drug card under Medicare.
The association and Express Scripts said details of the program still need to be worked out, including how much it would cost to enroll. The federal government also has to approve any drug card proposal.
Should Walgreens proceed with a drug card, it is likely that the chain, too, would work with a pharmacy benefit manager, a company that works as middleman between drugmakers and employers when it comes to buying drugs.
Bernauer said several pharmacy benefit managers have approached Walgreens about a drug card, but he wouldn’t say which ones.