THE BUREAU OF NATIONAL AFFAIRS: HEALTH CARE POLICY REPORT - JULY 1, 2002
Consumer Group Faults Steep Rise In Drug Prices, Supports Hill Democrats
The prices for the prescription drugs used most heavily by senior citizens rose by an average of nearly three times the inflation rate in 2001, the consumer group Families USA said in a study issued June 24.
The group said that without increased benefits within the Medicare program and a moderation in drug prices, many Americans will continue to be unable to afford the drugs they are prescribed.
The group's study found that the 50 most prescribed drugs for seniors had an average price increase of 7.8 percent between January 2001 and January 2002, almost three times the 2.7 percent rate of inflation for that period. The study also included four-year averages, which showed that drugs used heavily by seniors rose twice as fast in price as the inflation rate between 1997 and 2001. The study was conducted using statistics from the Pennsylvania Pharmaceutical Assistance Contract for the Elderly program, according to the report.
Drugs which increased the most in 2001, according to the study, include metoprolol (a beta blocker), Demadex (a diuretic), Premarin (estrogen replacement), Plavix (anti-platelet agent), and Zestril (ACE inhibitor). For these five, the report claims all rose at least five times the rate of inflation.
Of the 50 drugs examined, 40 were brand-name drugs. These 40 increased in price by an average of 8.1 percent in 2001, and only three of those did not increase in price. Ten of the 50 were generic drugs, and nine of those did not rise in price at all in 2001, creating an average increase of 1.8 percent for the 10 generics, according to the report.
Support for Democrats. Ron Pollack, executive director of Families USA, stated the group's support of congressional Democrats' drug benefit proposals, and said that these proposals are the most reasonable way to deal with the rising costs shown in the report. "There is no reasonable basis for the alarming price increases, which continue to make prescription drugs unaffordable for too many seniors," said Pollack. He also expressed disbelief over the industry claim that the rising costs are due to research and development.
Appearing at the press conference with Pollack were Sen. Debbie Stabenow (D-Mich.) and Rep. Frank Pallone Jr. (D-N.J.), who both criticized the congressional Republicans' Medicare drug benefit plan, which would include a drug benefit costing $310 billion over 10 years. Stabenow and Pallone claimed the bill, which was approved by two house committees on June 19 and June 21 and is headed for the House floor soon, would do little to curb prescription drug costs and would place more of the burden of costs on seniors.
Democrats on the House Ways and Means Committee offered and alternative which would cost as much as $800 billion over the next 10 years, but the amendment was defeated.
"The biggest concern I have is that the Republican bill in the House does nothing in regard to price," said Pallone. Stabenow, who heads the Democratic Prescription Drug Task Force in the Senate, outlined the Democrats' alternative, calling for increased Medicare coverage, giving the secretary of health and human services the ability to negotiate the price of prescription drugs using Medicare's bargaining power, limiting the tax credits given to drug companies for advertising, and eliminating what Stabenow called loopholes in the patent laws, claiming that they allow drug companies to extend patents beyond the 20-year expiration date.
Industry Response. The Pharmaceutical Research and Manufacturers of America, a trade group for the prescription drug industry, released a statement June 24 in response to the report. PhRMA emphasized its commitment to "a meaningful Medicare drug benefit," and also emphasized that patients unable to afford medicines should apply for drug companies' patient assistance programs.
Alan Holmer, president of PhRMA, said prescription drugs can help many people avoid costly surgery. He also said drugs can vary in price, and that seniors "may want to shop around to find the best value" for their medications.
