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"The Rising Cost of Prescription Drugs"

Part 3


"The Battle Continues....Facts vs. Fiction"

The bus from Canada is going to take all of us for a ride!

Recently, a healthcare provider in my home state indicated that one of the major reasons for the rising cost of health care was the rising cost of prescription drugs. They said:
"A national survey by William M. Mercer, the New York benefits consulting firm, reported that drug prices were a major contributor to 1998 increases, up 13.8% from 1997. The influx of new, costly pharmaceuticals to the market (now often marketed directly to consumers through television and print ads) indicates that this trend will continue unabated."
At a recent presentation, they attempted to indicate that prescription drugs were the primary reason for the rising cost of health care. Despite posting a loss for the past year, they recently expended millions of dollars (supposedly), to execute a survey which does little if anything to improve the delivery of health care in my home state.

Now, Iím no fool, They are the largest health care provider in my state, and I am a subscriber to their insurance plan. They provide one of the best plans available, but my premiums recently experienced a major increase. If they claim that prescription drug prices are a major contributor to the rising cost of health care,.....then, is the following Fact or Fiction?:

When I review the data on the PhRMA website:   http://www.phrma.org/facts/phfacts/4_00.html (Pharmaceutical Research and Manufacturers of America (PhRMA), an organization which represents some American pharmaceutical companies), they claim:
"According to the latest data on national health spending, total private health insurance premiums increased 8.2 percent in 1998. An analysis of these data shows that about 60 percent of this increase was due to increased spending on hospitals, physicians and other health care services, and only about a quarter of the increase reflected increased spending on prescription drugs.

1998 Health Insurance Increases

2.3
Prescription
Drugs

+
4.8
Physician, Hospital, Other
Healthcare Services

+
1.1
Administrative
Costs + Profits"

= 8.2%
Now, Iíve got a health insurance provider that says "Itís the drug costs", and a drug manufacturer organization saying "drug costs didnít go up much."

If you look at a specific article in the 5/8/00 issue of Newsweek magazine at:


There is some interesting information provided. What you do not see on the web site article is the pie chart or graph which indicates the disparity in the price for prescription drugs purchased by the Federal government, HMOís, and the uninsured, or the price paid in various countries for the same drugs.

But letís not stop here. One organization seems to think that recent efforts by Congress to deal with this issue are an unwarranted intrusion on the part of the Federal Government into private enterprise.

A recent series of advertisements make some rather distressing claims about the proposed actions by Congress to deal with some of these problems.

You can access these claims and advertisements at:
which is maintained by a Group called Citizens for Better Medicare. Although one would think that this organization is comprised of citizens working towards a better Medicare system, you might want to check out who funds this organization. You also might want to check out the validity of the information which they include in their advertisements (Some of this information can be reviewed in a recent press release from US Senator Byron Dorgan: http://www.senate.gov/~dorgan/press/05012000b.pdf ).

This is a volatile issue. I do not propose that private industry suffer increased regulations on the part of the Federal Government merely for the sake of regulation. But, I do demand a fair and equitable treatment of the American consumers. I also demand a fair and honest disclosure of the facts by those organizations and individuals involved in the industry. http://www.BusFromCanada.org does not depict a fair and honest description of the issues. The information provided on this web site does not serve the common good, and contradicts the dedicated efforts of many members of Congress. In fact, it misrepresents the needs of the common American citizen.

I should not have to drive to Canada to purchase prescription drugs for my Grandmother which have been manufactured in the US and approved by the FDA, but are sold in Canada for far less than what they are sold for in the US. In fact, it is illegal to cross the US border into Canada to purchase prescription drugs unless I have a Canadian Doctorís prescription. Additionally, it is illegal to import into the US, drugs which were originally manufactured in the US, but exported to foreign countries and sold for a lesser price in the foreign country than what they are sold for in the US. In other words, if a drug is manufactured in the US and sold for $100 in the US, but exported to a foreign country and sold for $50 in the foreign country, it is illegal for an American company to import the foreign sold drug (albeit US manufactured) for the $50 cost, and sell it on the US market for the reduced price. The net impact of this process is that a US pharmaceutical manufacturer can sell a drug in the US for $100, and export and sell the same drug in any other country in the world for $50. For some inexplicable reason, it is illegal to "re-import" these US manufactured drugs into to the US at the reduced "foreign-priced" rate.

I guess the bus which is coming down from Canada is coming down to take us all for a ride. It seems, that is what the financial supporters of that organization are trying to do to all of us. If they really wanted to help us, they would tell the truth,....convey the facts (like what many members of Congress have done). In actuality, what theyíve done is confuse the issue, make people lose sight of what the real issues are, and cloud the issues with emotional rhetoric. I wonder who pays for their medical or prescription care plans??? Why donít you call them up and ask them. You might be surprised to hear the level of medical benefits they receive,.....or, the prescription drug benefit plans which they have access to.

Senior citizens should not be sacrificing food, heat, clothing or the other necessities of life only to afford prescription drugs. HMOís and health insurance providers should be lobbying "For" their subscribers, rather than lobbying for their bottom line. Sure, all of us in private industry are concerned about our bottom line,...but if we totally ignore our customers, sooner or later, we will have no bottom line. HMOís and health insurance providers should realize that their bottom lines are directly related to the health of their subscribers. Let us all die by reduced and restricted benefits, and the HMOís and health insurance providers will experience the reality of diminishing returns.

Make the health care system work, and we will all realize a profitable end result. Protect a self-serving solitary interest, and we will all suffer a financial and health care disaster.

In previous commentaries we have attempted to point out that there currently exists an unfair pricing structure for prescription drugs for American consumers. We have listed various sources of information to support these claims. The recent advertisements which have been developed by Citizens for Better Medicare have done nothing less than confuse the issue, and infer that government intervention would have a negative impact on this problem.

It is my opinion that many members of Congress really do care about this issue, and they are willing to work with all concerned to ensure that equitable health care is provided to all American citizens. We have identified some Congressional activities and some other relevant issues in previously posted commentaries. These commentaries can be accessed at:

The Rising Cost of Prescription Drugs
Part 1
"Managed Care" or "Managed Profits"
http://www.deionassociates.com/comment/comm3.htm

The Rising Cost of Prescription Drugs
Part 2
"Compounding Pharmacists: An Under-utilized Solution"
http://www.deionassociates.com/comment/comm5.htm

Recent legislative actions have been initiated by member of the US Congress in an attempt to effectively deal with the rising costs of prescription drugs. Their efforts should be applauded!!! We have identified some of the sources of information which these Congressional members have put up on the internet in previous Commentaries, but will list these sources again:

US Senator Byron Dorgan (D-ND)
Press Releases:
  http://www.senate.gov/~dorgan/
http://dorgan.senate.gov/newsroom.html

Please research the Senatorís web site for applicable sections which indicate his legislative initiatives regarding prescription drug costs.


US Senator Slade Gorton (R-WA)
Press Releases: (Healthcare)
  http://www.senate.gov/~gorton/
http://www.senate.gov/~gorton/policy.htm

Please research the Senatorís web site for applicable sections which indicate his legislative initiatives regarding prescription drug costs. There are some sections which you can access from the Senatorís "clips" section where you can read various publications, or, listen to broadcasts.



US House of Representatives Prescription Drug Task Force:
An excellent resource for data, reports, guides, etc.:
http://www.house.gov/berry/prescriptiondrugs/

Donít ignore this site. There are tomes of reports and data available here.
Congressional bills that you might want to check out are:

S 1191 or HR 1885
You can access the status of these bills at:

Thomas Legislative Information on the Internet
http://thomas.loc.gov/home/thomas.html



We seriously recommend that you review the proposed legislation, editorials, comments, reports and data available on the above listed sites.

As the costs for healthcare continue to rise, numerous issues need to be addressed. Any rational consumer in a similar situation would look for cost-competitive products, and a manner to maintain services at a fair and equitable price. This is all that many of us have asked for. This is all that many members of Congress have attempted to initiate for American citizens... a fair and equitable healthcare system which meets the needs of the population. Unfortunately, the American consumer is currently supporting and subsidizing the prescription drug costs of the populations of many foreign nations.

I implore you to read the facts!!! There is no logical, sane explanation why an FDA approved, US manufactured drug sells for more in the US than in a country it is exported to.

.....Upon reflection, the previous statement is incorrect. If the primary objective is profitability,.....then there is a logical and sane reason for the current international pricing structure for prescription drugs.

Hopefully, some of the dedicated members of Congress who are working to resolve this issue will be able to have an impact. Let them know that you support their efforts. Give them a call, write a letter. Communicate your views to your congressional representatives!


Mark S. Deion
4 May 2000

© Copyright 2000



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