Continuing a trend towards reducing the direct cost of drugs outside of negotiated insurance rates, Merck & Co. announced a discount-drug program for uninsured Americans.

The announcement came as part of a widening industry bid to address political criticisms of high drug prices and blunt efforts to legalize drug importation from Canada. Drug companies will also come under increased pressure as individuals begin paying full price for their prescriptions as part of HSA programs.

Pfizer, Inc., the world's largest drug maker, announced last year that it would provide discounts on drugs for senior citizens.

The new Merck plan, however, offers discounts of 15% to 40% on its medications to uninsured Americans regardless of age or income. Pfizer's program has income limits.

Possible HSA Use

Some industry observers believe that the program will also be used by individuals who pay for prescription drugs using their own funds and later applying the totals to their HSAs.

Most drug makers, including Merck, already have long-standing programs that give free medicines to patients with incomes of less than roughly $19,000. But many Americans without drug benefits and with incomes above that level still struggle to pay for their medicines, and the Merck and Pfizer programs are meant to address their problems. Many of those patients turn to Canadian drugstores to buy their medications, even though such purchases are illegal.

The Whitehouse Station, NJ company said that "for most Merck products" in the program, the discounts are "greater than or competitive" with those available in Canada. In addition, the Merck spokesman said the discounts are generally as deep as those received by large payers such as big employers and insurance companies.

Discounts on Merck products will vary from 15% to 40%, and will be consistent with discounts available through other Merck programs—such as a program to provide discounts to Medicare beneficiaries who lack drug coverage.

Some Drug Costs

Cholesterol drug Zocor, Merck's biggest seller, will be discounted about 40% from retail pharmacy prices, a Merck spokesman said. The average retail price at Walgreens for Zocor is about $150 for a one-month supply, so a 40% discount could translate into savings of about $60. Fosamax, a popular osteoporosis medication, will get a discount of about 21%, according to Merck. The average retail Walgreens price for Fosamax is $85, so a person in the program could pay about $67. Prices will vary by pharmacy.