DRUG PRICING: Will Congress Take Action?
The current issue of National Journal reports that legislators and consumer advocates are growing increasingly concerned about discriminatory drug pricing, especially toward elderly people who may have little or no prescription drug benefits under an HMO or Medigap policy. Democratic staff members of the House Government Reform and Oversight Committee determined that seniors are paying up to 1,446% more for some drugs than "favored-group purchasers" such as managed care plans, large hospitals, Medicaid and other federal health plans. Critics of the pharmaceutical industry claim that drug companies are recouping losses imposed by "cost-conscious health plans" by raising prices for underinsured seniors, who have no way to get their prescriptions filled other than at the corner drug store. Rep. Marion Berry (D-AR), a registered pharmacist, said, "There's abundant evidence that seniors are the ones who are getting really whacked." The pharmaceutical industry claims that astronomical R&D costs necessitate high drug prices, but Rep. Henry Waxman (D-CA) said, "Their case is so much weakened when you look at the high prices the elderly pay to keep (companies') profits high." According to Fortune, the top ten pharmcos posted $20 billion in profits last year with average profit margins of 28.7%, "nearly three times greater the average at brand-name consumer companies." Legislators such as Sen. Paul Wellstone (D-MN) are pushing for FDA regulations and possibly new laws that would ban price discrimination. Drug costs for seniors are also being debated by the bipartisan Medicare reform commission. Rep. Bill Thomas (R-CA), the commission's co-chair, insists that bringing managed care to Medicare recipients will help alleviate the pharmaceutical pricing issue (Werber Serafini, 10/31 issue).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.