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Read Making a Killing

home / healthcare / in the media

Orange County Register
Apr 03, 2003

by Cheryl Walker, The News

Drug prices: why so high?

What you can do to bring them under control.
In early March Leisure World's People for a National Health Program urged residents to boycott a U.S. pharmaceutical company because it decided to stop selling drugs to Canadian pharmacies.

The manufacturer's action cut off one source of affordable drugs for Americans, particularly seniors.

At PNHP's March 19 meeting, Jerry Flanagan of The Foundation for Taxpayers and Consumer Rights explained why American consumers pay the most for their prescription drugs and have to resort to buying out of the country to meet their medical needs.

Flanagan said reasons have nothing to do with the manufacturers contention that research and development accounts for the lion's share of the cost.

Flanagan said last year alone drug manufacturers were the ninth leading contributors to political parties and individual politicians, the very people seniors are hoping will support a Medicare prescription drug benefit.

He noted that of the 625 industry lobbyists 21 have former ties to the congress giving the lobbyists an insiders edge and access unknown to other representatives.

Flanagan said that no drug manufacturer is opening his books to show that R&D is the reason for high costs. But, a recent report by Public Citizen, which looked into the firm's Internal Revenue statements, showed that only a fifth of what was being reported by the manufacturers is actually spent on R&D and much of that money comes from government grants.

What the manufacturers do spend a lot on is advertising -- three times what is spent on R&D, he claimed.

The manufacturers, he said, are also limiting consumers access to generic drugs. Formulas that should go generic are tweaked with ingredients, coloring and the like and remain patented long after the expiration point. Oftentimes, he added, the original formula remains as effective as the new and improved.

He said it doesn't make sense that the manufacturers can still make a profit selling to Canada at half the U.S. price and Mexico at two thirds the U.S. price.

Flanagan urged seniors to use their letter writing and voting power to let politicians know that they want a Medicare prescription drug benefit.

''Seniors need to be emboldened by their voter turn out and don't be fooled by anything less than a Medicare prescription drug benefit.''

Currently, PNHP is urging residents to boycott the products of Glaxo Smith Kline because of the drug manufacturer's recent decision to stop providing its drugs to Canadian pharmacies and it is also amassing signatures on a petition to California lawmakers urging them to lobby for a Medicare prescription drug benefit.

Ted Rosenbaum, PNHP's political coordinator, says his organization is not alone in its boycott and noted that the Greenlining Institute, the Senior Action Network and most recently the Congress of California Seniors is joining suit.
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For further information and to sign a petition, call Rosenbaum, 458-6335.

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