A new study by AARP found that prescription drug prices increased an average of 7.1% in 2004 — more than twice the rate of inflation — underscoring the need for a U.S.-wide prescription drug bulk purchasing program, according to the Foundation for Taxpayer and Consumer Rights (FTCR).
Under pressure from the pharmaceutical industry, President Bush and Congress opposed bulk purchasing in the 2003 Medicare prescription drug law, which banned the 41 million member Medicare program from negotiating discounts with pharmaceutical companies.
“Cheaper prescription drugs shouldn’t be just for Canadians,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. “Bulk purchasing — the Costco approach to controlling drug costs — requires drug manufacturers to negotiate for a fair price.”
In the summer and fall of 2004, FTCR sponsored two chartered train trips, dubbed the “Rx Express,” that took seniors and other patients to Canada to purchase prescription drugs at 60% discounts.
Drug prices are lower in Canada, Ireland, England, France, and Germany because those countries negotiate bulk discounts on behalf of all patients. The U.S. Department of Veteran Affairs (USDVA) operates a similar bulk purchasing program on behalf of the nation’s 39 million veterans and saves 50% and more off the list price of prescription drugs.
According to the AARP study, since 1999 manufacturers of 153 brand name drugs have increased prices by an average of 35.1%, compared to an inflation rate of 13.5% over the same period.
The report provides price increase data for prescription drugs commonly prescribed to seniors:
– Toprol, manufactured by AstraZeneca to treat high blood pressure increased – 9.1% price increase.
– Lipitor, manufactured by Pfizer to control cholesterol – 6.4% price increase.
– Fosamax, manufactured by Merck to treat Osteoporosis – 6.7% price increase.
– Celebrex, manufactured by Pfizer to treat arthritis – 6.6% price increase.
– Plavix, manufactured by Bristol-Myers Squibb to treat heart disease – 7.9%.
The report is available at: http://www.aarp.org/research/press-center/presscurrentnews/2005_rx_prices.html
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The Foundation for Taxpayer and Consumer Rights (FTCR) is a nonpartisan consumer advocacy organization.