Prescription Politics

"Prescription Politics"

Two recent studies have shown that prescription drug prices
rose significantly during the first quarter of the year. AARP,
an advocacy organization for older Americans, found that the
prices charged by pharmaceutical companies for brand-name
drugs increased by almost four percent. A similar study by
Families USA, a healthcare advocacy group, found a nearly
identical increase. Given the vast sums that the
pharmaceutical industry has spent lobbying against price
controls, the dramatic increase in the cost of drugs isn’t
surprising. 

The AARP study determined that brand name drug prices
increased at more than four times the rate of inflation during
the first three months of this year. This was the largest
quarterly price hike in six years. Older Americans take an
average of four prescription drugs a month; this increase
means that the cost of these prescriptions rose by almost $240
between the first quarter of 2005 and the first quarter of
2006. The study by Families USA confirmed the AARP’s findings.


It’s no coincidence that there was a surge in drug prices
earlier this year. The pharmaceutical industry purposefully
raised the prices shortly before the new Medicare part D drug
program, which provides prescription drug benefits to seniors,
took effect. When the Bush administration lobbied the
Republican-controlled Congress to pass the Medicare
Prescription Drug Improvement and Modernization Act, it
ensured that the act contained a provision barring Medicare
from negotiating price discounts with pharmaceutical
companies. This was a huge windfall for the drug companies. A
Boston University study found that 61 percent of Medicare
funding spent on prescription drugs becomes profit for the
pharmaceutical companies. 

The pharmaceutical industry has spent vast amounts of money to
ensure that drug prices remain high, according to a recent
analysis by The Center for Public Integrity. The center found
that in 2003 and 2004 prescription drug companies and their
trade organization, Pharmaceutical Research and Manufacturers
of America (PhRMA), spent more than $44 million lobbying
against measures in numerous states to regulate drug prices.
And the industry donated more than $8 million to politicians
in various states. State governments are some of the
pharmaceutical industry’s largest customers; they purchase 16
percent of all prescription drugs in America. 

According to the National Conference of State Legislatures, 33
states have attempted to enact programs aimed at cutting the
cost of prescription drugs since 2003. In response to these
efforts, PhRMA’s top priority has been to “advocate against
any attempts to impose price controls.” And PhRMA has enjoyed
considerable success. Massachusetts State Senator Mark
Montigny was the 2005 chairman of the National Legislative
Association on Prescription Drug Prices, a consortium of
legislators from many states that champions price
restrictions. According to Mr. Montigny, “We are being
squashed by the pharmaceutical industry money. They have
killed lots and lots of legislation across the country.” 

The success of the pharmaceutical industry in subverting price
controls has allowed drug companies to dramatically increase
prices. Earlier this year Ovation Pharmaceuticals bought the
right to manufacture and market the cancer drug Mustargen from
Merck. In less than a month the cost of a two-week
prescription of Mustargen jumped from $77.50 to $548.01. And
when Ovation bought the rights to Panhematin, a drug used to
treat a rare enzymatic disease, it raised the price from $230
a dose to $1,900. 

Similarly, Genentech recently announced plans to raise the
price of its colon cancer drug Avastin. The drug currently
costs about $50,000 per year for treatment. It has shown some
promise in treating other forms of cancer, so its use is
expected to increase significantly. Consequently, Genentech
indicated that the drug will cost $100,000 per year when used
by patients with breast and lung cancer. Last year, Genentech
raised the price of Tarceva, a lung cancer drug, by almost 30
percent, to $32,000 for a year’s treatment. 

Although the Food and Drug Administration oversees the drug
industry, it doesn’t have the authority to regulate drug
prices. But there’s ample evidence that the federal government
can successfully control drug prices when it wants to.
Although Medicare is forbidden from negotiating prices with
drug companies, the Department of Veterans Affairs is required
to negotiate the best prices possible. Consequently, the VA is
paying 46 percent less for many popular brand-name drugs than
the average prices available under the Medicare plans for the
same drugs. 

If the Democrats are looking for a moral values issue to
campaign on in the fall elections, they need look no further.
We need a Congress and a president who are willing to take on
the pharmaceutical industry, and authorize the FDA to regulate
drug prices on behalf of the American public. If we fail to do
so, the nation’s health will continue to suffer. And access to
prescription drugs will increasingly be a luxury only for the
affluent. 

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Gene C. Gerard has taught history, religion, and ethics for 14
years at various colleges in the Southwest, and is a
contributing author to the forthcoming book “Americans at
War,” by Greenwood Press. He writes a political blog for the
world news website OrbStandard at
http://www.orbstandard.com/GGerard.