State Drug Price Surveys Find Seniors Pay Double

Nov. 8, 1999

State Drug Price Surveys Find Seniors Pay Double

Survey Results Show Need to Force Consideration of Allen-Waxman
“Prescription Drug Fairness for Seniors Act”

WASHINGTON, DC ? Millions of seniors without prescription drug coverage are being gouged when they buy their medications at pharmacies across the nation, according to the results of prescription drug price surveys conducted in three states by Public Citizen and local seniors groups.

Surveys recently conducted in New York state, northern Los Angeles County and Albuquerque, N.M., show that seniors without drug coverage are being charged approximately twice as much for prescriptions as “most-favored” customers such as HMOs, insurance companies and certain federal agencies. Overcharges averaged 110 percent in northern Los Angeles, 106 percent in New York state and 90 percent in Albuquerque. Additional studies will be released in Pennsylvania, Wisconsin, New Jersey, Arkansas and San Diego over the next two months.

Public Citizen urges Congress to end this prescription price discrimination and let the millions of seniors and disabled Americans on Medicare use their bulk buying power to receive fair drug prices. This can be accomplished by passing “The Prescription Drug Fairness for Seniors Act” (H.R. 664/S. 731), sponsored by Reps. Tom Allen (D-Maine) and Henry Waxman (D-Calif.), and Sens. Ted Kennedy (D-Mass.) and Tim Johnson (D-S.D.). The bills would require pharmaceutical manufacturers to give local pharmacies the same “best” price for Medicare beneficiaries as they give their most favored customers.

“This price-gouging is outrageous and intolerable,” said Frank Clemente, director of Public Citizen?s Congress Watch. “Many seniors have retired on fixed incomes and can?t afford to pay for the prescription drugs they need to stay alive and well. We applaud the sponsors of the Prescription Drug Fairness for Seniors Act for initiating a discharge petition to force consideration of this very important legislation.” A discharge petition enables members of Congress to force the leadership to bring legislation to the floor.

Public Citizen is leading a grassroots campaign for this legislation that includes organizations such as the N.Y. Statewide Senior Action Council, Congress of California Seniors and the Gray Panthers of Greater Albuquerque. Members of Public Citizen and the seniors? organizations have conducted a survey of more than 200 pharmacies in the three states that has determined that seniors without prescription drug coverage are paying unnecessarily high retail prices.

The groups also support adding a comprehensive prescription drug benefit to Medicare, which provides health care coverage for people who are 65 and over or disabled, but does not cover outpatient prescription drugs.

The pharmaceutical industry?s response to the push for fair pricing has been to claim that ending price discrimination against seniors would threaten funding for research and development. However, Public Citizen?s research shows that it is profits, not research and development, that is the real reason behind the high cost of prescription drugs for seniors. The top 10 drug manufacturers put one-and-a-half times as much money into profits last year as into research and development. Even after research and development costs were accounted for, the pharmaceutical industry was ranked the most profitable industry in 1998 by Fortune Magazine.

“The pharmaceutical giants are generating their profits on the backs of America’s seniors,” Clemente said. “They make their unnaturally high profits by charging their highest prices to senior citizens who can’t do without their products. Of course they don’t want to change the system.”

The grassroots campaign is designed to counter the $30 million “Big Lie” advertisement campaign being orchestrated by the pharmaceutical industry, which features “Flo,” a fictional senior who says she doesn?t want government in her medicine cabinet.

“They may have Flo appearing on television every night, but we have thousands of real senior citizens who are not actors but concerned citizens working on the Campaign for Affordable Prescriptions, surveying pharmacies and organizing press conferences,” Clemente said. “We will continue to organize until the drug companies are forced to stop this outrageous price gouging.”