Press Briefing by Dr. Mark Mcclellan, Administrator For the Centers for Medicare and Medicaid Services to the Travel Pool

Aboard Air Force One

En Route Liberty, Missouri

1:55 P.M. EDT

MR. SCOTT McCLELLAN: All right. I thought I'd bring our Medicare and Medicaid Administrator back here to talk to you a little bit more about today's event and give you an update on some of the progress we're making on implementing some of the benefits in the Medicare law, particularly the prescription drug discount cards.

He's someone I'm pretty familiar with and he appears to know what he's talking about on these issues, so I'll just turn it over to him, and then you all can ask questions after he gives you an update.

DR. MARK McCLELLAN: Thanks, Scott.

It's good to be here with you all today. We're going to meet with some seniors this afternoon who are actually already starting to enjoy savings on their drug costs through the Medicare approved prescription drug card program.

And as you all know, this is a program that's a first step towards drug coverage for all seniors through the Medicare Modernization Act that was passed in December. And now we're just six months after the enactment of that law, and after talking about giving help to seniors for a very long time, we're actually doing it.

The seniors who are participating -- who are meeting with the President this afternoon are already enrolled in a card, they're already getting savings on their prescription drug costs. Many of you who have been following this have seen some of the studies and reports that have been done on savings available through the card. In general, we're seeing savings of 10 to 25 percent, or more, below what people have been paying for their prescription drugs. That's a savings of 15 to 30 percent off the list prices for brand name drugs, and a savings of 30 to 60 percent or more for generic drugs, which are just as safe and effective as the brand name drugs and often cost a lot less.

The many seniors who are able to shop around and look for good deals can get a little bit off the cost of their drugs with a pharmacy discount card or something like that. But unlike the new Medicare cards, those cards generally don't get savings from the drug manufacturers. These cards have negotiated savings built in from drug manufacturers that are passed on to seniors, and that's an important reason why seniors can get some savings.

So any senior who is having trouble with their drug costs should look into this program, and that's especially true for low-income seniors, who can get some extra benefits. They get not only the discounts that are available through the card program, but also $600 a year this year, and $600 again next year in direct financial assistance on their card. It works -- it's automatically built into the card, so when they present the card to a pharmacy, it gets scanned in and they can get money taken out of that credit balance automatically. There's not anything else that they have to do -- no submitting a claim or anything like that.

On top of the financial assistance, many drug manufacturers are offering additional discounts to lower-income seniors. So if you add it all together, they can be literally thousands of dollars in assistance. Drug companies like Pfizer, Wyeth, many others are offering these wrap-around discounts that all together amount to literally thousands of dollars in help.

We've already seen -- even though this is the first, really the first couple of weeks that this program has been up and running, we've already seen more than 3.3 million seniors signing up for the program and starting to use their discounts through the cards. And there are many ways that people can get information about it. Some get information from their pharmacist or their health professionals about signing up for a card that can get them savings at their neighborhood pharmacy. Other people can call us at 1-800-MEDICARE, anytime, day or night. And on many days we're still getting over 100,000 calls a day, which we're handling. We've got more customer service representatives, they're available anytime, day or night, to help with seniors. And so their waiting time when they call us up now is typically no more than just a few minutes.

And if they're ready with a little bit of information when they call us up, we can handle their call and get them the information they need about how to get the most out of the program very quickly -- just their ZIP code and the drugs and dosages that their on and their income level and we can tell them how to get the most of the card program. And then, after they've got that information, signing up is very straightforward. There is just a two-page enrollment form, or they can call an 800 number for the card that they want to join.

And it's steps like today's event that we're taking to try to make sure people are educated about the fact that real assistance is available right now if they're struggling with their drug costs, to help get those costs down.

Q: Isn't the fact that you're just flooded with calls indicative that there's a significant problem, in terms of signing up for this program? I think that's the point the Democrats are making --

DR. MARK McCLELLAN: Well, it's indicative that a lot of people are trying to find out about the program and how they can get the most out of it. And I've listened in on some of those calls. It takes -- if you call in, first we ask you about whether you are eligible for the program -- and, basically, everybody is eligible who doesn't get coverage already through Medicaid. And if you don't have good drug coverage, you're likely to get some savings, some important savings below what you're paying now because you don't have good drug coverage. And then you can go through these questions about your ZIP code and your drugs and dosages, find out about savings at your neighborhood pharmacy.

So this all takes well under 15 minutes, and we want to be there to answer those calls. Millions of those people are signing up. We've got up to 3.3 million enrollees now. Many people are projecting that in the course of this program, only about 7 million people altogether would be helped. And just for comparison, other programs, when they've started up -- like the CHIP program, the Children's Health Insurance Program -- only had about 20 percent of their expected enrollment in the first year. We're already approaching 50 percent. We're trying to take new steps to make sure people know how they can get the information they need as quickly as possible, and that's what the phone lines are doing right now.

Q: Mark, some people have said that the seniors are still getting more advantage by going to Canada to get their drugs; the drugs are still lower when you're going there or buying them on line. Are you still opposed to reimportation of prescription drugs from Canada?

DR. MARK McCLELLAN: The Medicare Modernization Act set up a requirement that the Department of the Health and Human Services investigate whether and how drug importation could be done safely. And I'm part of that task force that Secretary Thompson set up to answer those questions. We've had a series of public meetings. We're getting some analysis done right now on drug prices and costs and how those safety issues can be addressed.

You've seen a lot more interest in Congress around determining whether and how importation can be done safely. While people want to find a way to do importation safely they know -- and I think there's broader recognition than ever -- that there's some real safety problems that need to be addressed.

Right now, though, if people want savings on drugs at their local pharmacy, this is an important way to do it. There's no question that the savings available through this program are real and that are significantly -- prices are significantly lower than are available to people when they walk into their drug store today. And that's the way most seniors like to get their drugs.

Q: The phone line, 1-800, is that 24/7?

DR. MARK McCLELLAN: It's a 24/7 phone line. And people can also go onto the web if they or one of their children or caregiver is comfortable with doing that, and you can get all the information at medicare.gov. In additional, there are a lot of seniors who need face-to-face help in making decisions about how to get the most out of the Medicare program and how to get the most out of the health care system.

And we have set up programs with the states, with state health insurance assistance plans -- like, there's a program in Missouri called CLAIM that provides personalized help, face-to-face help with beneficiaries who may have trouble even making a phone call on their own, or if they have questions. This is a voluntary program, so nobody is being forced to sign up for anything. And we're taking all the steps we can to make it as easy as possible for people to figure out how they can get the most out of this and start taking advantage of it.

Q: And the $600 discount or the credit -- what is the level of income, when we say "low income"?

DR. MARK McCLELLAN: That level of income is about $1,400 a month for a couple, and about $1,040 a month for a single beneficiary. And there are about 7 million Medicare beneficiaries who have incomes below that level. So, for people today who are struggling because they've got a fixed Social Security check on the one hand and some high drug costs and high drug prices on the other, this is literally thousands of dollars in new help, so they don't have to make those tough choices between paying for food and other basic necessities on the one hand, and paying for drugs on the other. This is thousands of dollars' worth of additional help available right now to low-income beneficiaries.

And we've started a new partnership with more than 70 independent organizations, advocacy groups for seniors and others -- the National Council on Aging, many minority outreach groups and others -- to make sure that low-income beneficiaries find out about this really valuable new help, so they don't have to struggle with paying for drugs and other basic necessities.

DR. MARK McCLELLAN: Anything else?

Q: You mentioned the 7 million people. Who are they? I mean, why not -- why not all the other tens of millions?

DR. MARK McCLELLAN: Many Medicare beneficiaries have good drug coverage already, from an employer plan or from Medicaid. So for those people, they can keep doing what they're doing right now. And when the Medicare drug benefit starts in 2006, they'll get extra help. The states are going to get help paying for the full cost of comprehensive coverage for very low-income beneficiaries, and many more. And people who have employer coverage are going to get new subsidies to help strengthen their coverage.

They are getting drug coverage now, though, and so this is an interim measure that's intended to help the people who are struggling with drug costs because they don't have any drug coverage at all, or they don't have good drug coverage today. And help is available for them. There's been a lot of talk about this for a very long time, but help is available right now. So we're doing all we can to get people enrolled, to get them signed up so they can start taking advantage of it.

Q: So the 7 million, Mark, that's your projection of the number who will be enrolled eventually? It's 3.3 now --

DR. MARK McCLELLAN: Let me give you two -- there are two 7 million numbers out there. There have been projections made not by us, but independently, by the Congressional Budget Office and others, about 7 million people they expect to sign up. There are also close to 7 million people who can qualify for the low-income assistance.

So those enrollment projections are based on the fact -- and independent groups do this because they don't think everybody is going to sign up for the voluntary benefits. And that's why we're doing all we can to get people signed up now. And we've already got over 3 million signed up just in the first couple of weeks of this program. And we're starting some new steps -- including outreach with other groups, including partnerships with various state and local organizations -- to do much better than the historical track record for getting people enrolled in assistance programs. Because it is so urgent, it's so urgent to get help to people who are struggling with their drug costs.

Q: Could you break down that 3 million? Does that apply to the drug card, or does that apply to the low-income?

DR. MARK McCLELLAN: Some of them are low-income and some of them are the drug card only. It's about 3.3 million -- and I don't have a breakdown for how many are low-income right now. We will be having a lot more enrollment in the low-income program in the coming -- just in the next few weeks. We've been doing kind of an automatic enrollment program with many states that can identify some of the people who can be helped through this program. So those numbers are going to get significantly better -- significantly bigger even than 3.3 million in the coming days. But I don't have a breakdown right now on low-income versus drug card only.

Q: Aren't the vast majority of the 3.3. million automatically enrolled?

DR. MARK McCLELLAN: I wouldn't say it's the vast majority. A lot of people did get enrolled automatically through their Medicare advantage plans -- people who are in managed care plans in Medicare in many cases got a card automatically. But I think the estimates for that were around 2.3 million or something. So we're a million-plus above that now, and thousands more people signing up every day, reflecting those call-ins that we're getting.

Q: So you don't think it has been going slower than expected at this point?

DR. MARK McCLELLAN: Well, if you look back on starting any new federal program, there are always challenges in getting people informed about it, letting them know exactly how they can get the most out of it for the least amount of effort. And we've tried to learn from those lessons and take more steps through advertising, through working with state and local organizations and through forming new partnerships, to get more people enrolled. And that's paying off, in terms of seeing thousands more people signing up every day. And as I said, we're well over 3.3 million enrollees now, just two weeks into this program.

Q: When do you expect to make your decision on reimportation? Is that something that would happen this year?

DR. MARK McCLELLAN: The Secretary has directed us to work as quickly as possible to get through the task force efforts. I know that the Congress is also looking closely at these issues, and the administration through the FDA has tried to help them address some of the technical issues involved. So I'm pleased that there is a lot more interest in whether importation can really be done safely, and we'll keep working as quickly as we can to address the safety issues.

DR. MARK McCLELLAN: Well, I think it's -- it would be fair to characterize it as partly it's about educating seniors and letting them know -- and you'll be able to see from some of the seniors that the President meets with that people can sign up for these cards quite easily and can start -- get savings right now if they're struggling with their drug costs.

But an important part of our work on Medicare has been about making sure that we're giving personalized help, giving seniors the benefits they need. Our health care system is more complicated than ever, but it can do more than ever for beneficiaries. And that's why we're taking new steps to make sure people's medical needs are matched up with new help in getting it -- with new help in getting lower drug prices on the drugs that you need, not just some single government-run formulary, but the actual drugs that are relevant to your needs. And interactions with seniors is very important to make sure we're keeping Medicare -- or making Medicare as personalized as possible.

Q: What do you make of the talk among some lawmakers of both parties that maybe there ought to be some other ways to at least examine to lower the costs of drugs?

DR. MARK McCLELLAN: We're doing everything we can to lower the costs of drugs. Some of the other ideas that have been put forward have been looked at by the Congressional Budget Office, by others. And, first of all, they don't think they'll actually lead to any additional savings for seniors. And, second, I think it's very important for seniors to have an opportunity to get help with the drugs they need, not to be forced into any kind one-size-fits-all formulary that may not reflect their particular needs.

So those are our goals with this program. We're going to get them, we are getting them help getting lower prices. We're going to keep building on that for the drug benefit, but we're going to do it in a way that we make sure addresses their particular individualized needs.

MR. SCOTT McCLELLAN: Mention generic --

DR. MARK McCLELLAN: Yes, generic drugs are another area where the U.S. really leads the world. There has been a lot of press about how our list prices of drugs are higher than in other parts of the world. But a majority of prescriptions today in the United States are for generic drugs. These are drugs that work in exactly the same way as a brand name drug. It's not like knock-off purses or watches. Here in the United States the FDA makes sure that the generic drugs work exactly the same.

And because we've got a really competitive system for generic drugs, the prices for generics are typically lower in the U.S. than in other countries. So you can save 70 percent or more on average off the cost of a brand name drug by using a generic. And on top of that, the drug cards provide additional savings. They've gone out and negotiated additional savings on generic drugs.

We did a study recently which showed that people can lower their costs for some medicines by as much as 90 percent by switching over to a generic. And we help people find out about that -- that's part of this personalized assistance and information we give -- and then by getting lower prices, much lower prices on those generic drugs. It's another great way to save.

Q: -- in the program, though, you're promoting generic drugs? I mean, is there a push to get, especially low-income seniors, into --

DR. MARK McCLELLAN: I think generics are a very important way for people to save in this country. They are exactly the same active ingredients and they work in the same way as brand name drugs. And many seniors today, studies have shown, are still using brand name drugs, even when the generics are much cheaper.

One of the things that we provide when people call us at 1-800-MEDICARE, or go to our website, is information on when a generic drug is available for their particular medical needs and how much they can save by using it. We'll give them the actual price information. And that helps people be much more effective comparison shoppers inmeeting their drug needs.

There was study done last year that suggested that Medicare beneficiaries could save up to, I think, something in the neighborhood of $14 billion on their drug costs by switching to generics when they're available. And we want to make sure seniors get the information they need to take advantage of those savings.

MR. SCOTT McCLELLAN: -- approval process, too --

Q: So if I'm a senior and I'm calling in and I have a long list of drugs that I take, are you going through it with me -- because I think there was a lot of concern that their drugs wouldn't be on the list of approved drugs. So are you going to tell me when I'm Senior X that, no, your drug isn't on the list? I mean, is it an honest process of, no, your drug is not on the list, so this isn't going to benefit you, this card?

DR. MARK McCLELLAN: That's right. The seniors -- the way that it works is they give us some basic information about their personal needs, where they live, so that we can find savings at pharmacies in their neighborhood -- generally, the ones that they're already going to -- what medicines they're on, so we can match them up with the cards that give the biggest savings for those medicines. And if they have low incomes, we'll tell them about the additional savings they can get -- the $600, the wrap-around discounts, the thousands of dollars in more help.

And they'll be able to get -- they can get it on paper, they can get it over the phone -- the information on what the best cards for their needs are, so that they can make a direct comparison about what they're paying now out-of-pocket in total to what they can pay under the cards. And if there is a medicine that's not listed on one of the cards, they'll hear about that, too.

In general, though, most people have found that they can get savings on all of their medicines through the card program if they find the right card for their needs. Some of the cards have what are called "open formularies," where they cover basically all of the prescription drugs in the United States that are included in this program. And so those beneficiaries will generally be able to get savings across the board. And we'll give them the numbers that they need to compare.

When people have shopped for drugs in the past, they just get these cards -- they hear about 5 percent off or 10 percent off, but it's really hard to know what that means. The way this card program works is that you get the actual price information, what you would pay with the discounts for your drugs, so you can do real apples-to-apples comparisons of what you're paying now versus what you can save under the card program and make a good choice.

MR. SCOTT McCLELLAN: Thank you.

END 2:15 P.M. EDT