Prices for Prescription Drugs
Used by Seniors Soared in 2001
By: Sarah Lueck and Stephanie Norvath
The Wall Street Journal, June 25, 2002
WASHINGTON -- Prices of the prescription drugs most
commonly used by senior citizens rose, on average, nearly three times the
inflation rate last year, according to a study by a consumer-advocacy
group.
Of the 50 drugs most used by seniors, 36 rose at least
1.5 times the rate of inflation last year, and 18 rose three or more times
the rate of inflation, said the study by Families USA, a nonprofit
health-care research and advocacy group based here. Inflation last year
was 2.7%, excluding volatile energy prices.
Moreover, while only one of the 10 generic products in
the study increased in price, prices of all but three of the 40 brand-name
medications rose. Families USA charged that pharmaceuticals companies are
raising prices to cover direct-to-consumer advertising and administrative
costs at the expense of the elderly.
"There is no reasonable basis for these alarming
price increases, which continue to make prescription drugs unaffordable
for too many seniors," said the group's executive director, Ron
Pollack.
The report highlights rising drug costs at a time when
the House of Representatives is preparing to vote this week on a
Republican plan to add a drug benefit to Medicare, the federal
health-insurance program for the elderly and disabled. Families USA, which
supports a competing Democratic drug-benefit proposal, says the GOP bill
lacks provisions to bring down drug costs .
A spokeswoman for the House Ways and Means Committee, one
of two committees working on the Republican bill, said it would lower drug
costs under Medicare by pooling seniors' purchasing power and permitting
private companies offering the benefit to negotiate with drug companies.
If it passes the House, the GOP bill isn't expected to
survive the Democrat-led Senate, but it is setting the stage for a lively
election-year battle for seniors' votes, with Republicans backing a
private-sector-based plan and Democrats supporting a more expensive, more
generous benefit.
The Pharmaceutical Research and Manufacturers of America,
the drug-industry trade group, called the Families USA study
"misleading." Spokeswoman Jackie Cottrell said the industry
spent more than $30 billion last year on research and development of new
drugs, compared with $2.8 billion on advertising.
In addition, drug prices vary widely even within one
city, Ms. Cottrell said, so "seniors may want to shop around to find
the best value."
In the study, metoprolol, a generic blood-pressure drug,
had the steepest price increase, with a version made by Teva
Pharmaceuticals USA rising 20.3%, or eight times the rate of inflation
last year. George Barrett, president and CEO of the company, which is a
unit of Teva
Pharmaceutical Industries of Israel, said the percentage may seem
dramatic, but the drug's price went only from three cents to less than
four cents per tablet last year.
"The real message here is that generic drugs cost a
fraction of brand-name drugs," he said.
The prices of Demadex, a diuretic marketed by Roche
Holding AG of Switzerland, and Premarin, an estrogen-replacement drug
marketed by Wyeth,
Madison, N.J., rose nearly seven times the rate of inflation. A Roche
spokeswoman declined to comment on the study, saying the company doesn't
discuss pricing. A Wyeth spokesman said Premarin, at less than a dollar a
day for patients, is "still a virtual bargain."
Of the 50 drugs on Families USA's list, 42 were on the
market for the five-year period from January 1997 to January 2002, and
rose in price an average of twice the rate of inflation during that time,
the study said. Five of the drugs had at least nine price increases during
the five-year period, with Schering-Plough
Corp.'s antihistamine Claritin topping the list with 13 increases.
A Schering-Plough spokesman said the company doesn't
comment on the pricing of individual products, but is
"committed" to charging reasonable prices.
Write to Sarah Lueck at sarah.lueck@wsj.com
and Stephanie Horvath at stephanie.horvath@wsj.com
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