Rx DRUG COSTS: Most Americans Oblivious to Rising Prices

      Although the elderly remain in an uproar about skyrocketing drug costs, the majority of other Americans have not joined the charge, the New York Times reports. According to government estimates, 77% of Americans under age 65 have either public or private health insurance, and nearly all of those with insurance have some form of prescription drug coverage. "When people don't have to pay out of pocket, it lowers the political tension enormously," Prof. Robert Blendon of Harvard University, an expert on public opinion and health, said. Last year, more than half of all spending on prescription drugs in America was covered by private insurance. HHS expects the fraction of out-of-pocket drug costs to continue dropping over the next 10 years. Noting the trend, employers have begun reducing drug benefits, requiring higher copayments and limiting access to expensive new medications. While that shift may have future political ramifications, drug prices remain a low priority in Washington with both parties deadlocked and legislation going nowhere. Maine has threatened the pharmaceutical industry with price controls, and similar proposals have appeared in other states, but the moves appear related more to political posturing than a genuine interest in reform. Until a critical mass of Americans rails against drug companies, the New York Times reports that the attitude will likely continue. In a recent survey, pollster William McInturff found that only 28% of Americans with private health insurance had an "unfavorable view" of the industry. "I don't want to minimize the pressure politicians are feeling from the elderly who have to pay top dollar. But other than that vocal group, there is no great outcry about drug prices," he said.

Are Americans Really Paying More?
      While prescription drug prices continue their ascent, the reasons behind the increases remain elusive. Some experts cite rampant advertising for new and expensive drugs -- a trend absent in Canada and Europe -- as a major reason for rising costs in America, although pharmaceutical companies claim that higher prices for new medications are necessary to pay for research and development. While Americans do pay more for these drugs, according to recent findings, it remains unclear that overall, Americans pay more for drugs than people abroad. A study by Patricia Danzon, a professor of health management at the Wharton School at the University of Pennsylvania, found that Americans actually might not pay more, taking into account discounts received by drug companies, the widespread use of generic drugs and the difference in dosages prescribed in other nations (Rosenbaum, 6/1).

PhRMA Jumps in the Fray
      Speaking of advertising ... in the June 1 edition of the Philadelphia Inquirer, PhRMA ran a full page ad touting a private sector prescription drug benefit for the elderly. "[Twelve million] seniors now have no prescription drug insurance coverage. As a result, most of them pay full price for their medicines. That's because they don't have the market clout that comes with a drug insurance benefit," the ad contends. The ad also cites a Lewin Group study claiming that private drug insurance lowers rates for drugs 30%-39%. "Shouldn't seniors have it?" the ad asks (Philadelphia Inquirer, 6/1).