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More Information on Drug Pricing

Letter on High Drug Costs and Lack of Drug Coverage

May 4, 2001

Sen. Charles E. Grassley
Senate Finance Committee
Washington, DC 20510

Sen. Max Baucus
Ranking Member
Senate Finance Committee
Washington, DC 20510

Dear Chairman Grassley and Ranking Member Baucus:

As you are well aware, the issues of drug pricing and drug benefits are prominent in the current congressional session. We are writing to draw your attention to a very interesting paper to be presented today at the annual meeting of the Society of General Internal Medicine. The paper confirms that both high drug costs and lack of drug coverage can lead to patients not taking their medications.

The primary author on the paper is Dr. Michael Steinman of the San Francisco Veterans Affairs Medical Center. (He can be reached through the University of California, San Francisco press office at 415-476-2557.) In his paper, based on a national cohort of 4896 non-institutionalized seniors over the age of 70 who were regularly using prescription medications, he examined for whom cost was a reason they took less than the prescribed amount of medication. Eight percent of subjects with no prescription drug coverage, representing over one million Americans, reported restricting their use of medications due to cost, compared to 2% of those with full coverage. Among some subgroups, the rate of restriction was much higher: for example, over 43% of low-income (less than $10,000 per year) minorities with no coverage and out-of-pocket expenses exceeding $100 per month reported such restriction.

After adjusting for multiple factors, minorities with no prescription coverage were almost ten times as likely as minorities with full coverage to restrict their medication usage due to cost. Similarly, among patients with incomes under $10,000 per year, those without prescription coverage were 14 times as likely to restrict their medication use as those with full coverage. The study also showed that, after adjusting for other factors, patients without prescription drug coverage whose monthly drug costs exceeded $100 were over three times as likely to restrict their medications as otherwise similar patients whose monthly drug bills were less than $20.

This study clearly shows that both drug costs and prescription drug coverage are very strong predictors of medication restriction. This provides additional empirical support for what we have long asserted: the only meaningful Medicare prescription drug reform proposal is one that both provides insurance to all beneficiaries and allows for negotiated prices to ensure program sustainability.

Yours sincerely,

Peter Lurie, M.D., M.P.H.
Deputy Director
Public Citizen's Health Research Group

Frank Clemente
Public Citizen's Congress Watch

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