A widely advertised discount drug program for Medicare patients abruptly raised its prices for thousands of users this week.

Drug giants Bristol-Myers Squibb Co. and GlaxoSmithKline PLC, two of the seven pharmaceutical companies that created the program to ward off criticism they were charging seniors and disabled people too much for drugs, said yesterday that they were forced to reduce some of their discounts in the Together Rx program to comply with a federal drug-pricing law.

But Thomas A. Scully, who monitors compliance with that law as head of the government's Centers for Medicare & Medicaid Services (CMS), said in an interview that the drug makers were mistaken in raising their prices for low-income Medicare-eligible patients.

"They're raising their prices to seniors and they're blaming it" on the law, Scully said. He has seen no evidence that these companies are violating the law, he added.

"My guess would be they are lowering their discounts for reasons totally unrelated," Scully said.

"My guess is they are having problems with the discounts they originally set."

Together Rx was rolled out in June. It promised discounts of up to 40 percent off retail pharmacy prices on more than 160 widely prescribed medications. About 300,000 people have signed up for Together Rx, which has saved Medicare patients $6.4 million, a program spokesman said.

The problem comes in an interpretation of Medicare law. Drug makers cannot, under the law, offer discounts greater than 10 percent to Medicare enrollees unless they offer the same prices to the Medicaid program.

Several participants in the Together Rx program said yesterday that they are not raising prices because of the law. Executives from Novartis AG, Johnson & Johnson, Abbott Laboratories Inc. and AstraZeneca PLC said they were in full compliance with it.

Bristol-Myers and GlaxoSmithKline executives said they believe CMS has interpreted the law to mean drug makers must offer Medicaid enrollees the same low prices offered to Together Rx members. The companies have said they cannot afford to do so.

Both companies say they disagree with CMS's interpretation of the law, which they say was outlined in a June 24 letter by Scully to the Pharmaceutical Research & Manufacturers of America, a Washington-based trade group.

"We don't believe the law applies" to Together Rx, said Tom McKenna, senior vice president of planning and operations at Bristol-Myers.

Scully, in the interview yesterday, seemed to agree, saying he has never suggested companies participating in Together Rx were not complying with the parity law.

The Together Rx card is offered free to Medicare patients who do not have any prescription-drug coverage and whose incomes do not exceed $28,000 for a single person and $38,000 for a couple.

Drugs covered under the program are used to treat arthritis, diabetes, depression, high cholesterol and other conditions that commonly affect the elderly.

Bristol-Myers and GlaxoSmithKline executives said their price hikes, reported yesterday in the St. Petersburg Times, took effect Tuesday.

Companies participating in Together Rx met yesterday with CMS officials in an attempt to resolve the dispute. Scully said that he was unable to attend the meeting but that CMS officials agreed to schedule another meeting.

McKenna of Bristol-Myers said, "If this is resolved, we will reinstate our previous savings offerings and do our best to make restitution" to patients.

"We're still offering attractive savings but [the discounts] are not as aggressive as they were."

Bristol-Myers offers deeper discounts for Together Rx members who earn less than $18,000 (a single person) or $24,000 (for a family).

Last week, a 30-day supply of Pravachol (10 mg), a cholesterol-lowering medication, cost those Together Rx members $15, McKenna said.

This week, the price shot up to $59.19, he said. The price for higher-income members -- $59.19 -- did not change, he added.

GlaxoSmithKline said its discounts dropped Tuesday from an average of 33 percent to 25 percent.

And for no good reason, Scully said. "We don't think there is a problem here," he said.

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