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Travis Commissioners reject pharmacy discount card offer

Tuesday, January 19, 2010 by Jacob Cottingham

Travis County Commissioners found themselves entangled in the complexity of the pharmaceutical industry last Tuesday and ended up declining an official discount pharmacy card for county residents. After a briefing from industry representatives and a tough line of inquiry by Pct. 3 Commissioner Karen Huber, the court declined to endorse a card that would allow residents to obtain special discounts from pharmacies for prescription drugs.


The court heard from Edward Rahn, president of Financial Marketing Concepts, about development of the Coast2Coast program, which have created cards emblazoned with the county seal that residents could present to participating pharmacies to obtain between 20 and 40 percent off their pharmaceuticals and some services. 


The card would be similar to existing programs at Walgreen’s or CVS, although it would be more expansive, covering more than 60,000 prescription drugs. All county residents would be able to enroll in the program and only need to print one out from the website or pick one up at a library or other convenient government location.


Financial Marketing Concepts partners with WellDyne, a pharmacy benefit manager. The program is called the Coast2Coast Rx Card. The Texas Department of Insurance will begin regulating such discount programs in April of 2010. The Coast2Coast card would benefit the county by giving it 75 cents for each prescription filled. The payment would be royalties from Financial.


Coast2Coast had been selected from among four different programs county staff was evaluating since November. Rahn told Commissioners the program was originally set up to work with large associations such as homebuilders and national associations of convenience stores and is now primarily for the 20-25 percent of the population without insurance. He said 24 counties are already using the program.


Huber wanted to know if data would be collected on cardholders by Financial or WellDyne. Rahn said Hippocratic requirements forbade WellDyne from selling the information and that Financial as the marketer wouldn’t have any information except aggregated totals for users.


Huber also wanted assurances that those who may use the card wouldn’t be subjected to other product offerings from WellDyne. She also pointed out “the Texas Pharmacy Business Council says that many of the pharmacies that FMC claims to already participate do not know that they have agreed to do this in a previous contract. Some have even indicated they do not intend to participate, even though Financial is saying that they will.”


She then wanted to know where the county’s payment of 75 cents came from. Rahn said that for each prescription filled at a pharmacy there’s a “dispensing fee,” that the pharmacy keeps for itself when filling prescriptions. In the case of WellDyne, the pharmacy shares some of that dispensing fee. Rahn explained “and our pharmacy benefit manager then shares part of that dispensing fee with us, and we share, then, with the county part of the dispensing fee.”


Huber pointed out that citizens could also go online and print out a discount card from Coast2Coast and use it in Travis County, without the county having to set up its own version of the card and accompanying website. When she wondered, “Why is it necessary for us to issue a card with our seal on it?” Rahn replied, “The credibility that the county lends to the program is tremendous.”


Sherri Fleming, Director of Health and Human Services and Veterans Services told the commissioners, “Without the court’s endorsement, county staff would not be able to, on your behalf, promote this program in any way, provide the cards to our residents or encourage our partners to do the same.”


Huber concluded her line of questioning saying, “I don’t believe that Travis County should put itself in a position to be in a competitive market, and it looks to me, after all my research, that the discount pharmacy cards are a very competitive market out there, and under this program we would be receiving monies in return for it.”  She said, “There are other programs available out there, and I just think this is not where we should go right now.” 


She made a motion that the county not pursue the pharmacy discount card, which was seconded by Pct. 2 Commissioner Sarah Eckhardt. She surmised, “Seventy-five cents is a royalty in exchange for our endorsement in a private market. I think that that’s a slippery slope.”


Pct. 1 Commissioner Ron Davis abstained from voting saying he wanted more concrete numbers about the cost to the county for administering the program, opining that “Nothing’s free out there; I don’t care how you shake it, bake it or turn it over.”


Pct. 4 Commissioner Margaret Gomez also abstained saying “I just think it’s asking me to do just a little bit too much and forget those people who are relying on county government to come to their aid,” saying she would like more information. Judge Sam Biscoe agreed on her last point, though noted, “I’m not happy with the results either.” The final motion passed 2-0 with three abstentions, to essentially do nothing. Biscoe added, “which I think is a consensus position anyway.”

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