Thursday, November 04, 1999
Drug costs for seniors continue to rise sharply
Report: Hikes exceed inflation for fifth year
BY TIM BONFIELD
The Cincinnati Enquirer
Prices for the medications most commonly used by senior citizens have sharply outpaced inflation for the fifth straight year, a consumer health care group reports.
Drug prices for the 50 medications most commonly used by seniors rose an average of 6.6 percent in 1998, according to a report issued Wednesday by Families USA. That compares to a 1.6 percent increase in the Consumer Price Index, a general measure of inflation, in 1998.
As a result, seniors without prescription drug coverage are paying hundreds more per year out-of-pocket for medications. Many of those who have drug benefits from Medicare HMOs or certain Medicare supplemental plans are facing rising premiums or reduced benefits.
“This is a situation that is rapidly getting worse. Seniors are the only insured group in America that does not have prescription drugs as a standard benefit,” said Ron Pollack, executive director of Families USA. “It just doesn't make sense that the group that needs coverage the most is the one group least able to get it.”
While consumer groups say ever-rising drug prices justify a Clinton administration proposal to build a drug benefit into standard Medicare coverage, pharmaceutical industry groups argue that the wrong kind of reform could undermine research investment in new medications.
“The pharmaceutical industry does not disagree with anyone who says seniors need to have expanded access to medications,” said Jackie Cottrell, spokeswoman for the Pharmaceutical Research and Manufacturers of America.
“When Medicare was designed in 1965, medications didn't play the role in health care that they play today,” Ms. Cottrell said. “So it only makes sense to reform Medicare. But the devil is in the details.”
While lobbyists and policy specialists argue on Capitol Hill, Esther Riley watches her medical bills swell like an untreated infection.
The 78-year-old Clifton resident spends about $350 a month on allergy shots and drugs to control high blood pressure. She lives on Social Security.
“Everything has gone up. But you have to have your allergy shots or you don't breathe,” Mrs. Riley said.
Mrs. Riley said she wants the federal government to do something about the rising drug prices. She doesn't care much about the details.
“I can't live like most people would like to live,” she said. “I have to live in Section 8 housing. Even then, by the time I pay the rent and the medicine, I don't have anything left.”
According to Families USA, prices for 42 of the 50 top senior drugs rose faster than inflation; 17 rose more than four times faster than inflation.
Last year's price hikes come after several other increases in the past five years. Among the sharpest:
• Lorazepam, a drug to treat Parkinson's disease, cost $94 in 1994 for a year's supply. This year, the same supply cost $469.
• Lanoxin, a common treatment for congestive heart failure, rose 15 percent last year and more than 87 percent since 1994.
• Imdur, for angina, went from $237 for a year's supply in 1994 to $525 in 1995.
Families USA commissioned its study from the University of Minnesota. Figures were based on average wholesale prices, not necessarily the price individuals might pay at the drug store.
Ms. Cottrell said the consumer study shows only part of the picture. When counting all drugs on the market, not just the top 50 for seniors, the overall increase in pharmaceutical prices is closer to 3.2 percent, she said.
If so, that only means seniors are taking even more of a price hit than they should, Mr. Pollack said.
Commercial HMOs routinely negotiate discounts from drug makers when they purchase large amounts of medications. Mr. Pollack said seniors would benefit almost overnight if Medicare started using its purchasing power the same way.
But Ms. Cottrell said Medicare would actually be too powerful of a purchaser, so big that it would control the market like a monopoly.
If Medicare reforms force lower drug prices, it would scare investors away from pharmaceutical stocks. That would mean less money for developing new drugs, Ms. Cottrell said.
“In the past 10 years, 395 new drugs have made it to the medicine cabinet. There are more than 1,000 more in development,” Ms. Cottrell said. “Slowing down research and development would be a huge loss to patients.”
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