Stateline Story

Seniors' Drug Costs Sky-Rocketing, Advocacy Group Says

Eighty-six year old Montana resident Joan Stroup spends a lot of money on prescription drugs each month. A retired teacher and administrator, Stroup suffers from macular degeneration, eczema and psoriasis, allergies, asthma, hypertension and migraine headaches. Her total monthly bill is more than $1,300 a month for medications-- and that's when she buys at the Butte pharmacy with the cheapest rates.

Like many seniors across the country, Stroup has taken trips with lawmakers to both Mexico and Canada, where's she been able to get her medications at up to half what she pays in the U.S. "Drug companies say research and development [which is cited as a cost driver] benefits people in the whole world, but only the people in the U.S. are paying for it," she says.

Stroup brought her medical tales to Washington, D.C. yesterday (6/12) to back up findings from a new report on what seniors are paying for drugs. Families USA, a left-leaning consumer advocacy group that is lobbying for a Medicare prescription drug benefit, says the prices of the most-prescribed drugs for seniors rose more than twice the rate of inflation last year.

Some drugs have increased in price by eight times the inflation rate from January 2000 to January 2001, says Ron Pollack, Families USA executive director. Specifically:

  • Synthroid, marketed by Knoll and used to treat a thyroid condition, jumped in price by 22.6 percent,
  • Alphagan, used to treat glaucoma and made by Allergan, increased by 22.5 percent,
  • Glucophage, marketed by Bristol-Myers Squibb and designed to treat diabetes, went up in price by 15.5 percent, and
  • Premarin, used for estrogen replacement and made by Wyeth-Ayerst, climbed in price by 12.8 percent.  
  • The findings are not so far off the mark from a similar Families USA report released last year that found soaring drug prices. What's different this year, says Pollack, is that researchers went back even further in time to see what's happened with pricing.

    "What is so extraordinary is that even though a bunch of drugs have been on the market for a long time, the price of the drugs keeps on rising. Unlike most things in the economy, either you have price moderation because of competition or if you have a monopoly, there are regulatory bodies that oversee what you're doing. Everything is stacked in favor of drug companies [because prices aren't regulated] and fallout from the high prices is borne on the backs of senior citizens who increasingly find [medications] unaffordable," he says.

    Pharmaceutical manufacturers call the group's findings "manipulative." "The report incorrectly implies that all seniors pay the same price for each drug... [when] retail prices of the same medicine can vary by more than 100 percent within the same city block," says Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America (PhRMA).

    PhRMA spokesperson Meredith Art says the medications used in the Families USA report were not representative of what's really going on with prices. "Price increases have been modest. With more than 20,000 [drugs] on the market, [selecting 50 products] of course will have significant bias," she says.

    PhRMA officials do agree with Families USA on one point: Congress needs to create a prescription drug benefit program under Medicare. "It's our number one goal. We've been working with the White House and Congress to support" private sector-based plans like the legislation co-sponsored by Senators John Breaux (D-LA) and Bill Frist (R-TN) says Art.

    Breaux-Frist 2000, as it's known, gives seniors drug coverage and would curb costs by putting a limit of $6,000 on what an individual would have to pay. The program isn't a free ride for medications, as seniors would cough up half of the costs. Price discounts negotiated between drug companies and insurers would also be passed on to consumers.

    Some lawmakers would like Congress to go even further to help out the elderly. Senator Jay Rockefeller (D-WV), who recently took over as chairman of the Health Care Subcommittee on Finance, says he's throwing his support behind a measure to allow drugs to be reimported into the U.S. Rockefeller says the plan fits in well with concepts of competition and free trade. "Going to Mexico and going to Canada says to drug companies that we believe in the free market," he says.

    Hypothetically speaking, drug reimportation would mean seniors could get drugs at prices that are up to 50 percent lower in price than what they're now paying in the U.S. Congress passed a reimportation law last year, but its implementation has been blocked by a technicality in the law.

    Will Congress move forward to get a plan up and running this year? Rockefeller said recently that he "will not rest" until his colleagues pass a meaningful prescription drug plan. "I'm not pretending it's going to be easy and I'm not convinced there is total political will there, [though] there's a lot of talk there," he says.