|
||||||||
Investigative Report: Is Government Policy Favoring Big Drug Companies At The Expense Of Seniors’ Health? Are government policies allowing drug companies to rake in enormous profits at the expense of Medicare recipients? Growing numbers of senior Americans report they can't afford the prescription drugs they need to maintain good health. Drug manufacturers spent millions last year fighting efforts to add a prescription drug benefit to Medicare charging that it would lead to federal price controls and that industry profits are needed to bring new life-saving drugs to the market. We took a closer look at some of our government policies and here's what we found: Government policy favors over-priced brand name pharmaceuticals through delay of generic competition. An informal policy of granting patent extension of brand name drugs effectively keeps lower-priced generics out of the market, at a huge cost to consumers and state Medicaid programs. A case study of the cost to consumers for extending the patents of just eight drugs, including the allergy medication Claritin, put the cost at about $11.1 billion over a five year period. Consumers could expect to save $7.33 billion from generic versions of Claritin in the first five years alone. In 1999, TREA Senior Citizens League (TSCL) lobbied against the “Claritin bill” which would have granted Schering-Plough a patent extension of up to three years beyond 2002 for continued exclusive use of the drug. In the last 3 years Schering-Plough has spent $11 million lobbying Congress and almost $1 million in contributions to both parties. Generic drug makers say that once the patent ends, they could market an equivalent for one-fourth the current U.S. price. The vote on the Claritin bill in the Senate was tabled last year, but it's expected to be taken up again this year. Government policy favors over-priced pharmaceuticals through prohibiting the import of cheaper prescription drugs. The United States forbids wholesalers and retailers from buying drugs at lower prices in other countries, although such price shopping is encouraged in other countries, especially in Europe. A U.S. retailer may not purchase Canadian Prozac, for example, even though it costs 53% less in Canada than in the US and is manufactured in the same plant. On the other hand, every day thousands of U.S. senior citizens cross the borders to buy cheaper drugs. USA Today recently reported that one senior paid $38 in Mexico for prescription eye drops that cost $142 in her hometown. Then she paid $7.80 for the diabetes treatment Glucophage that costs $44 at her pharmacy in Arizona. U. S. law does allow individuals to bring back about a 90-day supply of medications for personal use. TSCL supports the “International Prescription Drug Parity Act of 1999” introduced by Senator Tim Johnson (D-SD). The bill would enable pharmacists and distributors to import FDA approved drugs that have been sold by drug manufacturers to foreign customers in places such as Mexico and Canada at greatly reduced prices—and thus passes the lower prices on to Medicare consumers. Government policy favors over-priced pharmaceuticals because unlike other health insurers, Medicare has no procedure to negotiate lower prices for beneficiaries. Medicare, unlike most other modern health insurers, does not offer its beneficiaries prescription drug coverage. Therefore, unlike private insurers, Medicare does not have any procedure to negotiate lower drug prices for those covered by the program. Government policy favors higher profits for pharmaceutical companies through five lucrative tax credits. Pharmaceutical manufacturers realize big tax savings from five tax provisions, which allow them to pay significantly less in taxes than any other U.S. industry, despite charging higher prices for drugs in this country than overseas. Sources: “Patent Extension Of Pipeline Drugs: Impact On U.S. Health Care Expenditures,” Stephen W. Schondelmeyer, Pharm.D., Ph.D., Professor and Director, PRIME Institute, University of Minnesota, 1999. “Americans Pay More For Medicine,” Dennis Cauchon, USA TODAY, November 10, 1999. “Drug Firms' Tax Breaks At Odds With Higher Prices, Study Says,” Curt Anderson, Associated Press, December 26, 1999. This article first appeared in Volume 5, Issue 5 of "The Social Security and Medicare Advisor" newsletter (April/2000). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
|
|
||||||||
