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The High Cost of Prescription Drugs
Millions of uninsured and underinsured Americans struggle to afford the medications they need. At times, they are forced to forgo medically necessary drugs when prices are out of reach. Today, nearly 46 million Americans under the age of 65 lack health insurance, and millions more with insurance lack prescription drug coverage. Young adults from 19 to 34 years old are the fastest growing group of uninsured, accounting for 40 percent of the total. At the same time, prescription drug prices are skyrocketing in the United States, rising much faster than the rate of inflation. In 2005, Americans spent $252 billion on prescription drugs. The federal government uses its buying power to negotiate lower prices for the drugs it purchases for its beneficiaries, such as veterans, government employees and retirees. Uninsured consumers, with no one to negotiate on their behalf, pay full price for their medications—if they are able to afford them at all. During the spring of 2006, researchers from the state Public Interest Research Groups (PIRGs) surveyed hundreds of pharmacies in 35 cities in 22 states – including the Albany area – to determine how much uninsured consumers are paying for 10 commonly used prescription drugs. The PIRG researchers then compared these prices with the prices the pharmaceutical companies charge the federal government’s Veterans Administration and with prices at Canadian pharmacies. Their report was issued last week and is available at www.nypirg.org. The report found that: • Uninsured residents of Albany pay 65 percent more than what the federal government pays for the same drugs, ranking the city 7 th out of the 35 cities we surveyed. • The uninsured in Albany pay 105 percent more for their medication at local drug stores than what they would pay at a Canadian pharmacy—more than twice the price. • Uninsured Americans pay roughly the same as the uninsured in Albany, paying 60 percent more on average than what the federal government pays for the prescription drugs surveyed and pay twice as much for drugs purchased at local pharmacies as they would pay if they purchased the same drugs from a Canadian pharmacy. The most disturbing conclusion of the study is that those who have the least – the uninsured – pay the most for their medicines. And the rapidly increasing costs of prescription drugs are forcing some employers to drop health coverage – thus increasing the numbers of uninsured! It’s a huge problem that cries out for action. One way to attack the problem is demonstrated by the way in which the Veterans Administration deals with its prescription drugs needs. It uses its purchasing power on behalf of millions of veterans and negotiates for lower prices. The state of New York should follow the VA’s lead. New York should create a prescription drug-buying pool to allow individuals, businesses and the government to use their combined buying power to negotiate lower drug prices. Here is how it would work. The state would pool its purchasing power through the millions of New Yorkers who obtain their medicines from government – Medicaid, programs for low income seniors, children and adults, as well as for public employees. It would then negotiate with the drug companies to lower the costs of prescription drugs. The state would then use some of the savings to offer discounts on drugs for the uninsured. And then the state would allow businesses to join in to get the same low drug prices. As businesses and individuals joined the drug-buying “pool,” the numbers would increase thus giving government negotiators more leverage for even lower-priced medications! New Yorkers deserve a smarter government. The state Assembly has agreed and passed legislation allowing the state to implement this program. The state Senate left town without addressing the issue. State taxpayers, uninsured New Yorkers and businesses should all hope that the Senate takes this issue up when it returns in September. That’s all for now. I’ll be keeping an eye on the Capitol and will talk to you again next week. |
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