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Court Rules Bush's Discount Drug Card Proposal Is Illegal

  • February 11th, 2003

U.S. District Judge Paul J. Friedman has ruled the administration lacks the legal authority to designate private companies to serve as the sponsors of a government-endorsed discount card for Medicare recipients, according to an article in the St. Petersburg Times. The judge called the administration''s attempt to create such a program without congressional approval "mind-boggling."

Under the administration''s proposed plan, seniors would pay up to $25 for one of several drug discount cards offered by five prescription drug benefit management companies that would receive Medicare's seal of approval. The cards would give seniors discounts of 10 percent to 13 percent on prescriptions. The five management companies were expected to profit from the program. Pharmacy trade groups filed a lawsuit claiming the drug card plan was unconstitutional.

Bush unveiled his discount drug card program with considerable fanfare during a White House Rose Garden ceremony July 12, 2001. But since then consumers or health plans have sued a number of the five drug benefit companies over the past year, accusing them of making huge profits at the expense of the people who are supposed to benefit.

Judge Friedman could find nothing in the law authorizing the government to create a discount drug card. "This is not a Medicare program," he said. "Rather, what''s involved here is creating a whole new program that does not find its predicate in statute." National Association of Chain Drug Stores v. Thompson (U.S. Dist. Ct., D.C., Civ. Act. No. 01-1554, Jan. 29, 2003). The Bush administration must now seek legislation in Congress to create the program.

The judge''s decision will have little, if any, effect on consumers because the number of drug discount cards already available to seniors has increased dramatically in the past year. Moreover, as previously reported by ElderLawAnswers, the General Accounting Office has found that drug discount cards of the kind proposed by President Bush offer little savings for elderly consumers.

For the full text of the article in the St. Petersburg Times, click here. (Article may be only temporarily available.)

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Last Modified: 02/11/2003

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