San Diego's (Prescription) Drug Problem

The San Diego Union-Tribune reports breathlessly on a new prescription drug benefit that will soon be available to residents of San Diego County.

According to the U-T, the county's Board of Supervisors unanimously approved an agreement yesterday to offer residents steeply discounted prescription drugs, as well as discounts on dental, vision, and hearing services, and even medicines for pets. Financial Marketing Concepts, the company that runs the Coast2Coast Rx Discount Prescription Card program in over 80 municipalities, says it uses its purchasing power to negotiate steep discounts from drug makers, much as insurance plans do. They claim to have saved individuals and families over $75 million in the past four years, on an average savings of $24.25 per prescription. San Diego officials expect 3 million county residents to receive discounted medications through the program. And not all of them are uninsured; according to Supervisor Ron Roberts, "While a majority of San Diegans have health insurance coverage, not every prescription is covered. So even some people with insurance might benefit from having this card. In fact, you might find it’s less expensive to use this card than the prescription might be available to you through your own health insurance."

Maybe we're just feeling negative, but something about this plan doesn't quite add up. For one thing, it seems unlikely that anyone knows how much this program will cost: the discount cards will be available online and at pharmacies, libraries and county government buildings, and there is no registration or approval process involved. You just walk into a pharmacy, and seconds later you can be using other people's money to buy medications. Given that at least one local politician is welcoming the crowding-out of drug plans provided by health insurers, it seems like the County wants to bump the market share of the FMC program at the expense of private insurance. (Interestingly, FMC will pay San Diego County $1.35 for every prescription filled through the program, as well as covering the costs of producing and distributing the cards and administering the program.) But what happens if FMC becomes the only game in town while offering cheap drugs and other benefits to all comers? Either shortages, or a refusal by drug-makers to do business with the company. We might be missing something, but this seems like a very peculiar way to do business.