Seniors and Drug Industry Fight Over Prices

Americans are cynical about statistics. They know that numbers can be tortured to tell tales. Two new studies on the cost of prescription drugs illustrate the problem.
One was announced by PhRMA, the Pharmaceutical Research and Manufacturers of America. This trade organization represents most major drug companies.
The industry reports, “Prescription drug price increases have been lower than overall medical price increases.” Lumping brand-name and generic drugs together, drug prices rose 4 percent last year. The inflation index of consumer medical costs for the same time frame was 4.7 percent.
The comparison is supposed to make prescription medicine look like a bargain.
It has been presented as a response to a study from AARP.
Numbers from the powerful senior lobby tell a different story. According to the AARP, the manufacturers’ wholesale prices for brand-name prescription drugs soared 7.1 percent last year. But generic drug prices rose less than 1 percent. General inflation ran approximately 2.7 percent in 2004.
From the AARP perspective, brand name pharmaceuticals don’t look like such a good deal. According to its analysis of 150 popular products, these brand name drugs have risen an average of 35 percent since 1999. That’s almost three times higher than overall inflation during that time (13.5 percent).
However the numbers get crunched, consumers are paying more for their medicines. The popular sleeping pill Ambien, which is advertised directly to consumers, jumped 11.9 percent last year. A month’s supply could cost about $100, more than $3 per pill.
The price of your medicines might give you a migraine, but treating it will be pricey. Imitrex, one of the most successful migraine medications, can run $20 a tablet.
When challenged about such prices, the industry always responds that it has to charge a lot to cover research and development costs. If Americans want better medicines in the future, they have to pay now.
Critics complain that the industry spends too much on marketing, especially on advertising prescription drugs directly to consumers. When you count in free samples (designed to get people accustomed to taking a new medicine), free lunches for doctors and their staffs and junkets in the name of continuing medical education, promotional dollars add up.
Regardless of how the numbers are analyzed, if your prescription bills are too high, you may be looking for ways to save money. Generic drugs are a first step, although some readers report that they don’t always perform as expected.
Drug companies give away free medicine to patients in need who meet strict eligibility requirements. And even though the pharmaceutical industry disapproves of importing drugs from Canada, that avenue is still open.
You can learn about access to free drugs, the pros and cons of generics and reputable Canadian online pharmacies in our Guide to Saving Money on Medicine. Anyone who would like a copy, please send $2 in check or money order with a long (no. 10) stamped (60 cents), self-addressed envelope: Graedons’ People’s Pharmacy, No. CA-99, P. O. Box 52027, Durham, NC 27717-2027.