2004 INNOVATIONS AWARDS PROGRAM



2004 Innovations Awards Program

Application Form

 

ID #: 04-W-04AZ

Category: Health and Human Services

State: Arizona

 

1. Program Name

 

The CoppeRx Card Program

 

2. Administering Agency

 

Governor’s Office

Arizona Health Care Cost Containment System

 

3. Contact Person (Name and Title)

 

Tim Nelson, General Counsel to the Governor

Del Swan, Pharmacy Program Administrator

  

4. Address

 

Tim Nelson—1700 West Washington, Phoenix, AZ 85007

Del Swan—801 East Jefferson, Phoenix, AZ 85032

 

5. Telephone Number

 

Tim Nelson—602-542-1586

Del Swan—602-417-4726

 

6. FAX Number

 

Tim Nelson—602-542-7602

Del Swan—602-252-6536

 

 7. E-mail Address

 

tnelson@

DWSwan@ahcccs.state.az.us

 

8. Web site Address

 

ahcccs.state.az.us

ernor.state.az.us

 

9. Please provide a two-sentence description of the program.

 

The CoppeRx Card is a free prescription discount card for Arizona’s seniors and Medicare disabled. By using the CoppeRx Card, eligible persons get discounts of 15-55% on prescription medications at 500 pharmacies statewide, with no restrictions on the medications covered.

 

10. How long has this program been operational (month and year)? Note: the program must be between 9 months and 5 years old on May 1, 2004 to be considered.

 

The program was implemented in June, 2003.

 

11. Why was the program created? (What problem[s] or issue[s] was it designed to address?)

 

Governor Napolitano created the CoppeRx Card program to help address the high cost of prescription medications for Arizona’s seniors and Medicare disabled. Mounting drug costs have placed significant burdens on seniors in Arizona and across the country who lack a comprehensive prescription drug benefit. The problem is exacerbated by the fact that pharmacy costs typically are not disclosed to consumers until the point of purchase and there has been virtually no retail price competition on these extremely cost-sensitive products. Prior to becoming Governor, then-Attorney General Napolitano conducted three statewide prescription drug price surveys, which found that the price of medications varied by as much as 700% from pharmacy to pharmacy.

 

Arizona had a budget deficit of nearly $1 billion when Governor Napolitano took office, so funding an actual prescription drug benefit was not an option. Instead, Governor Napolitano wanted a plan that would not cost any state dollars but that would force pharmacy networks to compete to offer the best discounts to Arizona’s Medicare eligible population. By competitively bidding the discount card, the Governor achieved substantial discounts from the winning bidder that other pharmacy networks have had to match in order to remain competitive.

 

When the CoppeRx Card program was implemented, legislation for a Medicare prescription benefit had not yet passed. Many of the CoppeRx Card’s features have been incorporated into the temporary federal discount cards called for under the new Medicare law. By implementing the CoppeRx Card program, Governor Napolitano took the lead in helping Medicare elgibles with their prescription costs while the federal program was getting started. Unlike the temporary federal cards, the CoppeRx Card will remain in use after January 2006, so that Arizona’s seniors and disabled can get discounts during periods when the federal Medicare law allows coverage gaps.

 

12. Describe the specific activities and operations of the program in chronological order.

 

January 6, 2004: With her first action in office, Governor Napolitano signs an Executive Order creating the Arizona Prescription Drug Discount Card Program. The order calls for networks of pharmacies from across the state to competitively bid on a program to provide discounts to all Medicare eligible Arizonans.

 

April 2003: After evaluating nine bids, AHCCCS awards a contract to RxAmerica to administer the Arizona Prescription Drug Discount Card Program. The following are details of the initial program, as awarded in April 2003:

 

θ       Enrollment required, with an annual enrollment fee of $9.95

θ       All Medicare-eligible Arizonans, including the Medicare disabled, can enroll

θ       Discounts of 15-55% off of the AWP, depending upon whether the drug is generic or brand name, and whether the person fills the drug at a retail pharmacy or by mail order

θ       No formulary

θ       Over 500 Arizona pharmacies participating

 

May 2003: Enrollment in the discount program begins.

 

June 2003: Participating pharmacies begin accepting the discount card.

 

December 2003: Aggregate savings under the plan exceed $1 million.

 

January 2004: The Arizona Prescription Drug Discount Card Program is re-branded the CoppeRx Card program and enrollment is made automatic. An initial mass mailing of 1 million cards is sent to seniors over the age of 65. The following enhancements are made to the program:

 

θ       The enrollment fee is eliminated.

θ       Every senior automatically receives a CoppeRx Card in the month they turn 65.

θ       Persons who receive SSDI and are waiting for Medicare eligibility are now eligible for the card.

θ       Arizona partners with Eli Lilly Company’s LillyAnswers Program for Medicare enrolled persons under 200% of the federal poverty level. These persons can obtain a CoppeRx Plus Card to purchase any Lilly-manufactured drug for a flat $12 per prescription per month.

 

February 2004: Aggregate savings under the plan exceed $100,000 per week and $2 million total.

 

13. Why is the program a new and creative approach or method?

 

When the CoppeRx Card was implemented only a few other states offered discount card programs. Of those programs, the CoppeRx Card offers the greatest discounts, broadest formulary, and no fee. It is the only discount card program that operates without state funding. No other state has a program that partners with drug manufacturer’s low-income programs. This partnership makes purchasing prescription medications at their lowest price easier as it combines cards.

 

14. What were the program’s start-up costs? (Provide details about specific purchases for this program, staffing needs and other financial expenditures, as well as existing materials, technology and staff already in place.)

 

The CoppeRx Card program was implemented with no expenditures of state money. All costs associated with the program have been borne by the winning vendor, RxAmerica. Staff from AHCCCS were used to write the request for proposal and award contracts. One staff person from AHCCCS is a point of contact for contract amendments. In addition, several members of the Governor’s staff spend time coordinating the program with RxAmerica and communicating with the public, the media, and the legislature about the program.

 

15. What are the program’s annual operational costs?

 

The program is operated without any state funding.

 

16. How is the program funded?

 

As the winning bidder on the RFP, RxAmerica funds the operating costs of the program. RxAmerica makes money on the program by, among other things, collecting $1.00 of the dispensing fee per prescription. (Even this amount is subject to periodic review and will be reduced or eliminated once RxAmerica has recouped the cost of mailing the 1 million cards to Arizona’s seniors). RxAmerica also collects certain rebates from pharmaceutical manufacturers, based on the volume of medications purchased using the card.

 

In addition, Riester-Robb, an advertising firm, has offered to develop a communications plan for the CoppeRx Card on a pro bono basis (estimated value, $56,000).

 

17. Did this program require the passage of legislation, executive order or regulations? If YES, please indicate the citation number.

 

The program was created by Executive Order number 2003-3.

 

18. What equipment, technology and software are used to operate and administer this program?

 

State of the art point of sale claims adjudication system

 

19. To the best of your knowledge, did this program originate in your state? If YES, please indicate the innovator’s name, present address, telephone number and e-mail address.

 

Yes, the CoppeRx Card program originated in Arizona. The program innovation was a joint effort of the Governor’s Office, AHCCCS and RxAmerica.

 

 

20. Are you aware of similar programs in other states? If YES, which ones and how does this program differ?

 

We are aware of similar discount card programs in Ohio and West Virginia. The CoppeRx Card program differs by the following criteria:

 

θ       More competitive discounts

θ       Open formulary

θ       Partnership with Eli Lilly Co for low income persons

 

 

21. Has the program been fully implemented? If NO, what actions remain to be taken?

 

The program has been fully implemented. However, we continue to negotiate with other drug manufacturers in order to partner with them as we did with Eli Lilly Co.

 

Future actions have been identified such as coordinating our card with the Medicare prescription benefit when it is implemented in 2006. Because of the gaps in Medicare coverage, the card will be of benefit to seniors after implementation of the Medicare benefit.

 

22. Briefly evaluate (pro and con) the program’s effectiveness in addressing the defined problem[s] or issue[s]. Provide tangible examples.

 

For the period June 2003 through December 2003, approximately 15,000 persons signed up for the card and saved about $1.1M. Because the program was accomplished without state funding, outreach to seniors to get them to enroll had been problematic. In addition, even a small enrollment fee proved to be a barrier to coverage. The program was revised in January, 2004 to eliminate the enrollment fee and send cards automatically to all seniors. Since January 2004, nearly 25,000 persons are actively using the card and saving approximately $500,000 per month in prescription costs. Further outreach will begin in the next several months to better promote the program among low income seniors and disabled.

 

LillyAnswers enrollment has increased 30% since January. This is an excellent statistic as it provides low-income eligibles with Lilly-manufactured drugs at a very low flat price.

 

In summary, the changes to the program in January 2004 have increased the program’s effectiveness, but Arizona continues to market the program to ensure that every senior and Medicare disabled person that can benefit from the card receives and uses the card.

 

 

23. How has the program grown and/or changed since its inception?

 

After we launched the CoppeRx Card the number of persons using the card has grown 60%. Prescription drug savings have increased from an estimated aggregate of $1.9 million per year to $6 million per year.

 

 

24. What limitations or obstacles might other states expect to encounter if they attempt to adopt this program?

 

In the current environment, launching a discount card would be difficult in light of the Medicare legislation, which created a temporary Medicare-sponsored prescription discount card program. It would be advantageous to start a similar program in January 2006 after the Medicare discount card program ends. Then a state-sponsored discount card program could help cover some of the gaps in prescription coverage in the Medicare bill.

 

 

 

 

Add space as appropriate to this form. When complete, return to:

CSG Innovations Awards 2004

The Council of State Governments

2760 Research Park Drive, P.O. Box 11910

Lexington, KY 40578-1910

innovations@

 

DEADLINE: All original applications must be received by April 20, 2004, to be considered for an Innovations Award for 2004.

ApplicationForm04.doc

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