NACDS: DRUG CARDS FACE LEGAL OPPOSITION

MARK HAMSTRA

ALEXANDRIA, Va. -- The National Association of Chain Drug Stores here last week said it found the same legal problems with the new federal discount prescription-drug card plan that it did with the original incarnation.

Larry Kocot, senior vice president and general counsel, NACDS, said it appeared that the new prescription discount plan, unveiled Feb. 28 by the Centers for Medicare and Medicaid Services, could violate the court injunction placed upon President Bush's first proposal.

"It's likely that the judge will have to ultimately decide whether or not the proposal has violated the injunction," he said, indicating that some type of legal action would be taken either during or after the 60-day comment period for the proposed rule.

A U.S. district judge issued a preliminary injunction against the original plan in September after the NACDS and other groups sued, saying that the administration lacked the authority to support the cards. The cards are being proposed as a temporary measure to provide discounts to uninsured seniors until a prescription benefit can be included in Medicare.

The new plan includes a requirement that card issuers negotiate discounts from manufacturers that would be passed along to pharmacies.

A CMS spokesman said the agency believes it has the authority to create this plan as part of its power to write new rules designed to increase consumer education about prescription drugs.