A New Kennedy Campaign on Drug Costs: Former House Member Pitches Prescription Discount Plan

BOSTON — The face on the screen is unmistakable, the nickname all that is needed. “Joe K,” as he is known in these parts, is back — barnstorming the region and blitzing the airwaves.

But this time the former politician is not selling himself; he is pitching a plan aimed at cutting prescription drug costs for the approximately 70 million Americans who now pay those bills out of pocket.

Using his nonprofit Citizens Energy Corp. as a model, Joseph P. Kennedy II plans to unveil today his answer to the vexing dilemma of how to afford soaring drug prices. Two years in the making, Citizens Health is a modest attempt to provide drug discounts by negotiating directly with pharmacists and manufacturers.

“It certainly is needed,” said John Rother, policy director at the AARP, a senior citizens group advocating a prescription drug benefit for Medicare recipients.

Pharmaceutical spending — which rose 19 percent last year — is the leading cause of escalating health care costs in America. The advent of high-priced blockbuster drugs, multimillion-dollar ad campaigns and an aging population combined to push drug spending to $132 billion in 2000, according to the National Institute for Health Care Management Foundation.

For $12 a year, Citizens Health members in three New England states would save an average of 40 percent off retail prices, said the former House member. “For people on maintenance drugs for things like high blood pressure or diabetes, they could save hundreds if not thousands,” he said.

Kennedy is hardly the first to tackle drug costs. Groups such as AARP and the Giant Food grocery chain have long sold discount cards; this summer, President Bush rolled out a proposal to give the government’s endorsement to such plans as a first step toward broader pharmaceutical coverage for retirees.

But the Bush proposal was blocked by a federal court and the prospects for far-reaching health care legislation have dimmed considerable in the wake of the terrorist attacks and softening the economy.

“Another casualty of the attacks is a prescription drug benefit for the American people,” Kennedy said in an interview from his downtown office here. “There’s not money left in the till.”

The son of the late Robert F. Kennedy has capitalized on the poor image of drugmakers and the threat of even more onerous legislation to lure two drug companies and close to 1,000 pharmacies to join his voluntary effort.

“There’s a great deal of anger in this country directed at the pharmaceutical manufacturers because of the perception they are raping and pillaging people,” Kennedy said.

“This is an opportunity to provide some leadership in the industry and reinforce the message it is important for a Medicare reform bill to pass that has a prescription drug benefit included,” said Nancy Pekarek, a spokesman for GlaxoSmithKline, one of two drug makers that have agreed to give extra discounts to Citizens Health.

The companies estimated they would reduce prices 10 percent to 20 percent on brand name drugs.

Rother was skeptical the new organization could achieve savings of the magnitude Kennedy predicted, in large measure because most discount plans offer the largest percentage savings on the cheapest drugs. That means the most expensive drugs remain pricey.

The real savings in Citizens Health come from the unique agreements with Glaxo and Bristol-Meyers Squibb Col, Kennedy said. The two companies make such popular medications as Pravachol (high cholesterol), Glucophage (diabetes), Flonase (asthma) and Paxil (depression). A random survey suggested customers would save between 24 percent and 36 percent on those prescriptions. Prices for generic drugs would be reduced more.

More than 1,000 social service agencies have agreed to promote the plan and help register applicants. Although Citizens Health hopes to target the needy, Kennedy said the group does not have an elaborate screening process. He assumes well-to-do people will opt to stick with private insurance plans, which charge, on average, a $5 to $25 copayment for prescriptions.

There is more than a touch of political craftsmanship in the latest Kennedy endeavor.

The man once considered to be a likely governor of Massachusetts in staging a campaign-style announcement tour today in Providence, Hartford and Boston. Televised public service announcements and brochures — all bearing Kennedy’s face — help promote the project. And for those New Endlanders interesting in joining, the number is as easy to remember as the face: 1-800-JOE-K-4RX.

Kennedy to Unveil Discount Drug Plan

Bay State residents who don’t have health insurance will soon have a way to get drug discounts similar to those given to insurers and other large buyers.

The organizers of Citizens Energy, best known for providing home heating oil to the poor, will unveil an initiative today called Citizens Health, which will offer drug discount cards to the public for a small annual fee.

Participants “will save a certain amount on branded drugs and even more on generic drugs,” said Joseph P. Kennedy II, the Citizens chief who is spearheading the effort.

Consumers would pay $12 a year for the card, which can be used at about 65 percent of drug stores in the state, including most independent and some chain outlets. Discounts are expected to average 40 percent.

“A lot of (drug discount programs) are pit-offs, they charge a very high price for the card and the discounts aren’t that high,” Kennedy said. “This is the cheapest card available and the discounts are there.”

Increasingly, groups are offering cards that provide discounts on drugs as well as other medical services because government reform has been so slow, said Jim Jacobson, a Boston health care lawyer.

“It’s something that can be done here and now while Congress still debates,” he said.

Initially the Citizens card will be available to Massachusetts, Connecticut and Rhode Island residents.

The new program is similar to a proposal Kennedy pushed on Beacon Hill.

Though it won passage and was signed by the governor, it was never enacted.

“After watching the antics that occurred on Beacon Hill, I said we could just go out and do this ourselves — that’s what we’ve tried to do,” Kennedy said.

Senate Ways and Means Chairman Mark C. Montigny (D-New Bedford) said he is disappointed that the acting Gov. Jane Swift, a Republican, didn’t set up a state-run discount plan.

“In this economic climate, we cannot afford to send off a Christmas gift to the pharmaceutical industry,” he said.

The state could have gotten better discount because it can create a larger buying pool to leverage bigger discounts, he said.