AFL-CIO Group Releases Study of Drug Prices
Kicking off its campaign to push for a Medicare prescription drug benefit, a newly formed AFL-CIO-backed group released a study yesterday stating that pharmaceutical companies last year earned after-tax median profits of 18.6%, "compared to 4.9% for all other Fortune 500 companies," CongressDaily reports. Yesterday marked the launch of the Alliance for Retired Americans, which will lobby for lower prescription drug prices and a Medicare drug benefit. The group held a rally at the Capitol yesterday, where AFL-CIO President John Sweeney said that the size of the alliance -- 2.5 million retirees and family members -- and its "national" focus will "make it an instant force to be reckoned with." Alliance members also rallied in front of Pfizer headquarters in New York, a protest designed to draw attention to the "outrageous prices" of prescription drugs, according to Ed Coyle, the alliance's executive director (Rovner, CongressDaily, 5/23).
According to the report, drug makers spend 30% of revenues on marketing and administration, compared to 12% on research and development. The report states, "Much of the companies' development of drugs actually is for derivatives of existing drugs rather than new drugs." To help seniors pay for prescription drugs, the alliance calls for a universal and voluntary Medicare drug benefit that has "affordable premiums and co-pays and ... protect[s] all beneficiaries from high out-of-pocket expenses." In addition, the federal government should enact "some system" of pharmaceutical price controls, without which "the costs of a Medicare benefit will not be affordable and millions of Americans of all ages will be denied their right to first-class health services" ("The Profit in Pills: A Primer on Prescription Drug Prices," 5/23). To view the full report, go to http://www.retiredamericans.org/theprofitinpills.pdf. Note: You will need Adobe Acrobat Reader to view the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.