The Federal Trade Commission announced Tuesday that it's sending out checks to about 13,000 Medicare recipients who relied on incorrect prices for drugs to treat breast cancer symptoms and epilepsy. The prices were posted on several websites, including Medicare.gov. Consumers who bought the drugs were actually charged as much as 10 times what was advertised, and that drove some Medicare recipients into the no-drug-reimbursement "doughnut hole" long before they should have landed there.
The incorrect prices were posted from 2007 through at least November 2008 by pharmacy management firm RxAmerica and affected customers at two big pharmacy chains, CVS and Walgreens. RxAmerica was acquired by CVS Caremark Corp. in October 2008, and the incorrect prices were changed shortly after the acquisition. But CVS Caremark, as the current owner, was held responsible for the errors and required to pay $5 million in compensation to those who were overcharged.
Staying on top of what you're charged for prescription drugs under both private insurance and Medicare Part D is a worthy retirement planning project. The same drug can vary significantly in price from one pharmacy to the next and choosing to get the drug via a mail-order service can reduce the price further. It is also wise to compare what you're actually being charged with the advertised price. Obviously, sometimes they don't match up.
Questioning the prescription when you first get it is the first line of defense. Ask the doctor:
- Is this drug covered by my insurance?
- Does the pharmaceutical company offer a rebate plan?
- Is there a generic version?
- Is there a cheaper drug that would do the job?
Staying healthy in retirement is the best solution. Older Americans with five or more chronic conditions incurred an average of $5,300 in prescription drug costs in 2008, compared to $1,230 for those with no chronic conditions, according to the Federal Interagency Forum On Aging Related Statistics.