Travis County Commissioners Court
January 12, 2010,
Item 19
We have one other item that we need to take up.
as I told our out of town guests, we would call it up at 10:30, we missed that target, but 19.
I think if we can just give some direction today about how we plan to go it will be sufficient, but 19 is to take appropriate action on the following related to recommendations by health and human services and veterans service department to implement a discount pharmacy card program, a, authorize a pharmacy prescription drug discount card program for county residents; b, approve staff recommendation to contract with financial marketing concepts, inc., for the provision of the coast2coast pharmacy card, a pharmacy drug discount program, c, authorize the use of the Travis County seal on the coast2coast pharmacy card and other appropriate materials promoting the program; and other related items. And we will call the tx item up next.
>> good morning, sherry flemming, executive manager for health and human services and veteran service.
I have with me ed Ron who is the president of financial marketing concepts and what I'd like to do is just give a brief summary of where we are today and then turn it over to mr. Ron to answer any questions that the court may have about the program.
basically health and human services staff have been looking at pharmacy card programs over the last year, and our interest in those programs was the result of the court being contacted by the national association of counties to look at their prescription card program.
as you are aware, we were then contacted by other programs that we have -- that also offer similar services.
we have to date looked at four different pharmacy card programs, and in addition to vendors and pharmacy cards offered by retail establishments.
so there are a number of pharmacy card programs in the market, many operating here in the Travis County area.
they all range from some minimal cost to having an indigent rimple.
requirement.
there are a people that provide them.
the staff at health and human services has settled on a recommendation for the coast2coast program, and basically because of the size of the formulary, there is a discount anywhere from 20 to 40%.
the availability of lab and x-ray discounts and a royalty to Travis County.
so with that said I'd like to turn over to mr. Ron.
>> thank you.
we appreciate the opportunity to be here today and to answer any questions that you may have about the program.
the card is intended for that -- the residents of the county without health insurance.
that number of people is generally between 20 and 25% of the population, and that number seems to be growing some today.
there are many people who have restricted formularies under their existing insurance plan where they don't have certain prescriptions covered.
many employers are now today going to a higher deductible insurance plan and many times the formularies are cut back, and lifestyle drugs like viagra and birth control and some dermatology creams are not even covered.
the plan also covered for pet prescriptions.
so in addition to that 20 to 25 or 30% of the population that could use the card, many people with health insurance today can benefit by this card being available to the public.
it's available to all residents of the county.
there are no restrictions.
there are no age limits.
there are no fees.
it is totally free to the county.
it's free to the customers.
we prepare all the marketing material.
wall dnrx is the pharmacy benefit manager out of denver, colorado.
it's basically a win/win/win situation for the county, for the residents.
I'd be happy to answer any questions that you may have to help expedite.
>> and there are pharmacies around this community that will be accessible to all residents.
>> yes, ma'am.
>> -- who will be able to fill some of these prescriptions.
>> the card is accepted at all the major pharmacies and most of the independents right now.
so all the major pharmacies in the area and most of the independents accept the card.
>> and even the county employees who might have an additional need for one of these prescriptions would be able to use what is existing with the county card, but then would be able to supplement with this card?
>> if there is a --
>> let me --
>> sure.
>> actually, no.
you would have to choose which discount you wanted to apply.
>> okay.
>> but if there were a drug that was not covered for whatever reason by our county insurance, then a county employee could use the card to receive the discount, or if they determined that the discount, by using the card, was a better benefit than the co-pay that our insurance would -- would charge.
the other thing is the sheet that you have is just sort of a sample of some common -- some common medications and some comparison costs, so it is -- it is not meant to represent the entire formulary that is available.
>> okay.
-- but I -- excuse me.
but I do want to recall what I think I heard you say, that this benefits more of the folks who do not have any healthcare coverage?
>> that's correct.
it's intended to provide some coverage for those who have no health insurance.
>> yes.
thanks.
>> the other programs that are out there, like wal-mart and the other discount drug programs, do they equally benefit those who do not have health insurance?
>> wal-mart has a very good marketing plan together, and they offer about 3 to 400 different prescription drugs that are priced at $4.
they have another program that covers another 600 to 700 prescription drugs, and that is for, like, $9.95.
together that's about 1100 different prescription drugs.
if someone were to take our card into a wal-mart, they get the better of the price of wal-mart or our card.
sometimes the wal-mart price because they got special programs for it is a better price, but in all cases wal-mart price or the card price, whichever is lowest, is the one that is used.
we cover 60,000 different prescription drugs.
wal-mart in their program covers the 1100 different prescription drugs.
so if a person has three different prescriptions to fill and he goes into the wal-mart, maybe one of those prescription drugs is a 4 offer $9 program but maybe the other two, they are going to be a 70 or $80 drug and maybe they can benefit from the card by using the discount card on those prescriptions.
>> I understand that there are some other discount drug programs, like as walgreen's or cvc and there may be a minimal up front cost for those but they cover up front prescriptions.
is that correct?
>> that's correct.
the walgreen's, I think, covers anywhere from -- and I've heard different amounts, 2 to 3,000 was the amount I heard recently.
somebody had mentioned to me that it might be up as many as 5,000 different prescription drugs.
you pay something like 30 to $35 to get the card.
the card does have some other benefits to it at walgreen's, but it is a discount for the prescription program, but then again, it covers that 2 to 3,000, 4,000 drugs in the program.
cvs also has a program similar to that where they cover a limited number of prescription drugs.
>> I've been very interested in this -- this project, and I have passed out, for your benefit as well -- in conversation with someone at your organization yesterday, my staff tried to do a flow chart.
>> right.
I saw that.
>> is there anything -- is there anything -- if there is anything in here that is incorrect, please let us know.
but I have a whole series of questions I'd like to ask, actually.
>> okay.
sure.
>> will fmc and/or well dine collect or sell data generated by this card?
>> no, we don't even receive information on who fills the prescription.
we don't have any information on --
>> we being?
>> financial marketing concepts, the coast2coast program.
>> welldine?
>> welldine will not sell -- they're hipaa compelled not to sell information or transfer it.
and we as the marketer don't even see the information.
the only report we get at the end of the month is the number of prescriptions, where they were filled, what pharmacy and how many, and that same report comes back to the county.
so the information that is available to anybody else is not used for any purposes for other marketing or anybody getting use of any information.
>> will welldine use this for other programs that they have under their umbrella program?
>> no ma'am, they will not.
and I know there are some other --
>> because that has been a problem with some entities.
>> well, there's another company out there that does take the information that they learn and they try to get them on the mail-order plan.
we don't do that.
and we would be glad to insert wording of such in our contract.
>> next question.
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 fmc is saying that they will.
might this create problems for Travis County down the line and are we endorsing a program and telling residents that they can use it at various pharmacies when it's possible they won't be able to do that?
>> well, what welldine makes arrangements with all the major pharmacies and oftentimes the independents of part of different buying groups, and those different buying groups have made arrangements for the pharmacies to participate in the program.
if a pharmacy does not want to participate in the program, that's their prerogative.
we do have from time to time pharmacies that will call us that are not part of the program, and once the program is announced they will ask to be part of it so that they can take advantage, if somebody has a card and they come in and they get a prescription filled, they're then going in and buying the other items, the tylenol, the eyeglasses, while they're waiting for their prescriptions.
so most of the time other pharmacies will participate, but the independents are less likely to want to do it because they're already being squeezed by the major players because of their special programs, the wal-mart programs that you mentioned.
>> so then does that follow that if we participate in this coast2coast program that we may be a part of putting the squeeze on our local independent pharmacies because they can't afford to compete?
>> well.
>> may I interject something?
>> my name is anna, I'm with -- health signer for Travis County health and human services, and I apologize for interrupting the conversation.
I think it's important to note that the question that was asked was, are we participating in squeezing a pharmacy that's already struggling in competing against larger pharmacies?
I think that perhaps one thing we haven't discussed is that a benefit of having a pharmacy participate is that you increase foot traffic, so that when you go into a pharmacy you not only purchase the prescription drug.
you also think, oh, I think I need some mouthwash and I think I need -- you know, the other stuff that's sold in the pharmacy, so that you can perhaps also see this as stimulating the business of a small business by increasing the foot traffic.
>> but we have some pharmacies, independent pharmacies that really don't sell anything but pharmaceuticals.
just a point.
do you know if pharmacies tend to raise prices for pharmaceuticals or other stars in order to make up their profit margin for paying royalties to welldine?
>> no, they do not.
they do not raise the price.
>> will residents or customers pay anything for using this card either directly or indirectly?
>> no, ma'am.
>> where does the 75 cents come from then that we --
>> it's part of the dispensing fee.
if I have a prescription and I -- let's say it's lipitor, and let's say the -- the retail price, and I don't know what the retail price is.
let's say it's $120, and I take that prescription to the pharmacist to get it filled and I have insurance.
that insurance will have a co-pay.
let's say it's $50 or $25.
so as a customer I'm paying the 25 or $50.
if I have that prescription and I go in and I have no health insurance or no discount card, that prescription I'm paying $120.
now, if I have a discount card and I go in, when I use that discount card the cost may be 70 or $80.
each time that that prescription is filled there's a dispensing fee.
part of that dispensing fee -- the pharmacist keeps that dispensing fee as part of their cost of doing business.
in the case of the discount card, the pharmacist shares that dispensing fee with our pbm.
and our pbm then shares part of that dispensing fee with us, and we share, then, with the county part of the dispensing fee.
it does not raise the cost one penny for the consumer, because it's part of the cost of doing business anyway.
>> pbm means?
>> pharmacy benefit manager.
>> okay.
>> t-h-a-n-k-s.
>> [laughter]
>> the 75 cents that the Travis County will get, how does this income benefit Travis County residents?
>> well, that's up to Travis County, but I would assume, and what most counties are doing is putting it toward other health-related benefit programs that the county has that can help the citizens of the county.
>> I understood that the coast2coast program was set up specifically to offer this pharmacy discount card to counties.
is that correct?
>> no, it's -- the coast2coast rx card is primarily working with counties today, but it wasn't set up initially to do that.
it was initially working with large associations, groups, home builders and nacs -- national association convenience stores and other groups and associations.
>> how many counties are participating in the program to date?
>> about 24 right now, and we have another 10 or 12 that will be coming in in the first quarter.
>> but 24 that are already actually --
>> yes, ma'am.
>> it's my understanding that someone could go on-line now and print out a coast2coast pharmacy discount card and use it, whether we go with this program or not.
is that correct?
>> there are -- there are different sites that people can go to, and what we do is we do a site for each of the counties.
so if you go on and you put in coast2coast rx forward slash travis tx, you'll get a Travis County card.
if you go on and do it with dallas tx you'll get a dallas county card.
so however -- whatever web site is used, that's where the revenue stream follows.
>> but can you not get one today on the web site, whether it's with the county or not?
>> yes, a person could actually go to one of the participating counties, or I think your web site and actually print a card and use it without a Travis County -- without a Travis County marker on that card, that is correct.
>> so then why is it necessary for us to issue a card with our seal on it?
>> the credibility that the county lends to the program is tremendous.
when we -- when we initiate the programs and we do a press conference, the media attends, and right away the people in the county then learn of the program and it gives a lot of credit to the program.
if I were to go up to somebody and say, I got a free pharmacy card that will give you discounts of 35 up to 40% on your prescriptions, a lot of people aren't going to believe it, because it's too good to be true, but with the county endorsement and the awareness that it creates when we get the media attention, more people can make themselves available -- or can get to the card.
and incidentally, the card that we have has other discounts available to the residents, so if somebody doesn't have health insurance and they go in and they need lab work or imaging work, we give discounts on that as well.
lab core, which is one of the biggest, or the biggest provider of lab benefits, is the company that we use, and the discounts on the lab is about 50% or better, and imaging is even greater than that.
so there's many people out there today that -- who do not have health insurance, and they go to their doctor and because they're diabetic or some other reasons, they have to quarterly or sometimes often go and get blood tests, that's a big expense, and the card itself, we got an 800 number and it's part of the web site, they can go on and find the lab corp.
nearest them and get the discounts.
and if somebody has a sprained ankle or messes up their knee they can go and get the discounts on the imaging.
and generally speaking, that is a tremendous discount.
the -- some of those services are $2,000, and we've seen them as low as $500 for the cost of that service.
>> in addition, Commissioner Huber, 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.
>> thank you, sherry.
you-all have spent a lot of time on this and I appreciate it.
I've got a bunch of other questions, but I think I've asked the most salient ones.
I'd just like to say that 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 drug -- discount pharmacy cards are a very competitive market out there, and under this program we would be receiving monies in return for it.
there are other programs available out there, and I just -- I just think this is not where we should go right now, and I'd like to make a motion that we do not further pursue the pharmacy discount card, and to help you, sherry, part of that motion would be that we make available through our appropriate channels information on where all the variety of pharmacy discount cards can be accessed in the community.
>> I'd second that motion.
>> let me ask, and I need to know this, in other words, there is nothing free out there.
I don't care how you shape, bake it or turn it over.
going to cost somebody something.
now, my concern is, what is it actually going to cost Travis County?
I know we -- I understand we're getting something in return, but the bottom line there is going to have to be some staffing that's going to have to be involved with saying, yes, we'll receive this money, per se, and we'll get it in a -- I don't know how it comes to the county, but the auditor office, somebody is going to have to get involved, so there is something that will involved with that.
so I'm just trying to get all of the ins and outs as far as what it actually will cost the county as far as staff time.
let's put a figure on it, and as far as the overall activity, would it actually balance out.
now, I understand they say, it won't cost the county anything.
this money just comes in, but there is a cost, and I guess my point is, what is the cost that's been assessed with this as far as all of the other hidden -- appear to be hidden situations?
and of course I need to know that.
>> Commissioner, I haven't applied the salary costs of the personnel who have worked on this project, but our best understanding based on some of the counties we've talked to, I think the maximum so far that I've seen is about ten hours a quarter that some county staff has worked either in the promotion of the program or providing information.
the coast2coast will mail out the cards to whoever we ask -- whoever we ask them to mail them to, so there would certainly be the time in generating a list of partners that we'd like to see receive the card.
>> what about the auditor?
>> the auditor would receive the payment that we would get from the royalty, so we certainly would have to run that through our payment system and determine what account the court would like it to be deposited in.
>> right.
I think I need to see a full assessment of what actual -- it will actually cost the county, even though it may not be on paper, but there is an association, because I firmly believe there is nothing that ever comes free, and it's going to cost somebody something.
what will it cost the taxpayers for a lot of these other kind of things?
I don't know.
of course it generates -- maybe the money it generates will offset those costs.
I don't really know.
so it's hard for me to support this at this point until I'm able to get some better logistics.
so I'm going to have to abstain on this this morning.
>> judge, may I make some remarks relevant to the motion?
>> yes.
>> I share Commissioner Huber's question with regard to a royalty in exchange for our endorsement, although I'm very gratified with the kind of program you have and have been talking it up with other individuals who may find it useful.
I'm concerned that since people can get this benefit no matter what, that really, the 75 cents is a royalty in exchange for our endorsement in a private market.
I think that that's a slippery slope.
while I applaud what you're doing, I think it's a slippery slope with regard to other competitive circumstances of a player in a competitive arena coming in asking for county endorsement in order to place themselves in a better position relative to their competitors.
and also, in a separate question, completely unrelated to this, we did at one time in my office do a flow chart not for fmc but for the pharmaceutical industry generally, and found that it is -- there is a tremendous number of middle men in the -- in the distribution of pharmaceuticals, period, and that it is that insertion of middle levels that is in great measure driving our pharmaceutical costs.
my fear is that this royalty in exchange for our endorsement, we would become yet another middleman in the distribution/delivery system of pharmaceuticals, but again, I want to applaud staff for doing a tremendous amount of research, and I want to applaud you for providing this kind of a discount in an environment where we're looking at 25% uninsured and then even those who are insured sometimes have really crappy programs. For instance, they may not cover what you term lifestyle drugs like birth control, how that's a lifestyle drug is blowing my mind.
so that.
>> would you like to say something?
>> yes, I would like to say something.
mostly what I would like to say is
>> [inaudible] --
>> if you have something new and different to say we welcome it.
I don't know that -- it's not a good time to repeat what's already been said, though.
>> I'm the executive director of the Texas pharmacy business council and we run about
>> [indiscernible] independent pharmacies in Texas, and I think Commissioner Huber and Commissioner Eckhardt have covered most what I was going to say in our proposal, but let me just tell you a little bit about discount cards.
there's a plethora of discount cards out there, and by the way, I went to coast2coast's site, and it has a place that if you don't -- if your county is not participating, it says click here, and I printed out a card, and I printed out a card
>> [inaudible] because they absolutely asked no questions, and it's available to anybody to print that card and use it.
what most of our profession's experience has been with the cards, first of all, nearly any independent pharmacy as well as chains have discount cards available to the public.
the prescription market is very competitive out there, especially the cash market because there's very little cash business anymore.
and Commissioner Eckhardt, you talked about all the middle men, you're right, and those middle men are driving the cost of pharmaceuticals, and as much as the pharmacy benefit managers are receiving as much as $7 in the -- per prescription in our market out there, and there's been a plethora of lawsuits across the country by health plans against their pbm's.
$700 million in settle little.
but let me just say before you consider any program like this in the future, I would make myself available and our organization and make our members available to work with you to assure that people get maximum value for their prescription drugs.
but let me talk a little bit about what he was talking about the dispensing fee.
I have yet to come across any discount card program that doesn't have an administrative charge and it's a charge that's actually paid by the patient, although it's collected by the pharmacy.
>> when you say administrative charge?
>> administrative charge.
>> administrative cost.
>> and they run anywhere from $1.50 to $3.
let me talk about when they come in and say, all these pharmacies have agreed to this plan, what the pharmacies have agreed to is a contract with welldine for some of their employee benefit plans that they administer.
I can tell you that one very large chain in the state that I talked to that I'm in conversation with them too, an executive from a chain, when I asked them about this card they said, no we haven't agreed to accept that card, but then I dug down and found welldine.
there's always a pbm connected.
there's a marketing company and a pbm.
they looked at their welldine contract, and to their surprise there was a line in their 25 page contract with welldine for employee benefit plans that they would accept these discount cards.
I've contacted every independent pharmacy in this county that was listed as as accepting this card.
not a one knew anything about this card and most said, I'm not going to accept that card.
so I think you made a wise decision, and I think -- this card is out there.
there are thousands of them that are available, but this last session of the legislature we passed a law regulating these discount healthcare programs, and our organization helped work for that passage, to assure that they're regulated and the public is not deceived.
our members fine in most cases, in a lot of cases, that the drug, when they bring the card in, that it's actually going to cost the patient more than they were already paying for it.
I can give you thousands of -- I could document that.
but I do think -- I know we know that your motives were pure.
you wanted to give a benefit to the citizens of this county, and our profession is dedicated to working with you to make sure the citizens in this county have access to quality healthcare.
>> that's a good point, and let me say this.
what is that web site that you clicked on?
>> what is that what?
>> you know, when you said you were looking for this discount card and you said you went through the process and you clicked on --
>> yes, I've got a copy of that too.
>> what did you click on so the viewing public out there will see, hey, I still have access to this card, regardless what the Commissioners court is doing this morning.
>> right.
and I didn't do this but I'm going to do it.
I'm going to go back and click on one of those county cards and get them too.
I can probably walk in the pharmacy, if they run the card through it will probably work.
but what it had was a link that said, if your county is not listed below, and of course Travis County is not listed because they haven't approved it yet, click here.
I clicked there, and that took me to that u.s.
prescription card, which is managed by welldine.
I tell you, a lot of these cards are out there simply for -- I'm not saying -- and he's claiming that welldine doesn't do this, but I can tell you that welldine and all pbm's do sell data.
they sell raw data to pharmaceutical manufacturers in order to gain rebates.
so it would be good if you ever do have a program that they disclose to the recipients of the free card what their data sales policies are, and that is required by law.
this card would have to be -- would have to be -- come under the new Texas department of insurance regulations regarding those cards.
>> I guess I have a question, then.
would the -- would the nagle card come under the same rules that may cover other discount cards?
>> we can only assume, Commissioner, that it will.
since the rules are not written yet, we're not -- you know, I would hate to say that it would or it wouldn't, but the assumption is that it would --
>> would cover everybody?
>> would cover everyone in this market.
>> any consideration, financial consideration, that card, whether it be through rebates, whether it be through data sales, whether it be through administrative fee, as we were discussing.
that's consideration.
before the law, when it was on the Texas department of licensing and regulation, didn't cover free cards.
it said or other consideration.
what we did was define what other consideration is, and all of those are financial consideration for the card.
>> so the nickel card, was it a free --
>> it's a cvs care mark card, it wasn't free because it required us to be members of naco.
and our cost of meb membership is 14 or $15,000 a year.
>> we've been given a list of medications by staff, 45 or 50.
>> right.
>> and here the welldine price has been compared to caremark and envision by naco and familywise.
this says that all these medications except one would cost less, you get a larger discount from --
>> you got that list from them, right?
>> well, where did we get this list?
>> yes, the list was provided by --
>> I'd love to have that list and go through it, and I'd like to provide a list of other medications and I'd like to run those cards through to see -- see what the price is.
>> thank you.
>> it turns on what benefits do residents receive.
the little royalty that we get is modest in the scheme of things, but you don't turn down a dollar in this economy, plus we would put it back mcpublic -- in public health.
>> but if our residents is get a larger discount on medications this they use, then in my view we should try to make that happen.
there is a motion before us to basically turn down staff recommendation and do nothing.
and do nothing.
seconded by Commissioner Eckhardt.
any more discussion of the motion?
all in favor of the motion?
show Commissioner Eckhardt and Commissioner Huber --
>> they -- abstain on that.
>> everybody against the motion?
everybody who abstains?
>> abstain, because of the information I asked earlier.
there's just not enough information for me and I really would like to see the overview of really what it costs from this -- from this gentlemen I'm hearing lot of other things, that's why I brought it out.
what is the real cost to the county, and to make sure that those particular savings out there that are realized by the residents are actually something they can -- and we get the best deal for them.
so I'm not ready -- that's why I abstained.
it's just -- not enough information.
>> I'll wait for some initial information as well.
I just think this is a horrible time to say to people who don't have any coverage at all, sorry, but, you know, we can't help you.
and -- wait a minute.
wait a minute.
I didn't interrupt anybody.
and especially when county government -- the purpose of county government is to be relevant to people's lives, especially when they can't afford anything else that other folks in the county can afford, especially a job that will give you health coverage.
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.
very, very difficult.
so I'm willing to wait until we have a little bit more information that will help us make a good decision.
>> motions kind of funny and results are too.
>> I'm willing to wait for additional information to help me make a good decision, but I'm not happy with the results either.
>> well, the vote would end up being two in favor of the motion to do nothing, zero against --
>> well, I'm going --
>> three abstentions.
>> three abstentions.
>> yeah -- waiting for additional information.
>> that motion carries, so we'll do nothing, which I think is a consensus position anyway.
thank you all very much.
>> thank you.
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Last Modified:
Tuesday, January 12, 2010 6:37 PM
