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Public Citizen Drug Price Studies Back Clinton Attack

Oct. 25, 1999

Public Citizen Drug Price Studies Back Clinton Attack
on Pharmaceutical Industry

WASHINGTON, D.C. — Public Citizen welcomed President Clinton’s announcement today that the administration will take on the pharmaceutical industry’s deceptive $30 million media campaign against legislation requiring Medicare to pay prescription drug costs for seniors.

“The drug industry gouges U.S. consumers, particularly those on Medicare who pay full retail price. Then it puts its enormous profits into a ‘Big Lie’ media campaign to block a prescription drug benefit by scaring seniors with a grandmother named Flo,” said Public Citizen President Joan Claybrook.

Public Citizen has teamed with local seniors’ organizations across the country to compare drug prices charged to seniors who pay full retail prices with those paid by drug companies’ most favored customers, such as large HMOs and the U.S. Defense and Veterans Affairs departments. The first study released, conducted jointly with the Gray Panthers of Albuquerque, N.M., found that the 10 drugs most commonly prescribed for seniors cost 90 percent, on average, more in local pharmacies than drug companies charge their most favored customers. The differences ranged from 41 percent more for the ulcer drug Pepcid to 216 percent more for the cholesterol drug Zocor.

“In all industrial countries except the United States, the government negotiates with the pharmaceutical industry to obtain prices that are fair to consumers and taxpayers,” said Dr. Sidney M. Wolfe, director of Public Citizen’s Health Research Group. “Using the purchasing power of 39 million Medicare beneficiaries to negotiate for fair prescription drug prices is good business.”

Without such negotiations, high and rapidly increasing prescription drug expenditures threaten to make any Medicare drug coverage unaffordable. A Public Citizen analysis of the Medicare drug plan proposed by the administration found that by 2008 the benefit will lose almost three-fifths of its value in 1999 dollars if inflation is not restrained.

“For too long, the pharmaceutical industry has held American consumers hostage to high prices with its favorite Big Lies — demonizing government price negotiations to help Medicare beneficiaries as ‘a government takeover of the prescription medicine business’ and threatening that research and development will cease if its price-gouging is in any way restrained,” Wolfe said. “It’s high time these lies are exposed.”