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Executive Summary
Millions of uninsured and underinsured Americans struggle to
afford the medicines they need, even forgoing medically necessary drugs
when prices are out of reach. When discussing the high cost of
prescription drugs, politicians often focus on the financial burden
carried by senior citizens. Unfortunately, as this report shows, high
prescription drug prices are a problem for Americans of all ages,
particularly for the uninsured.
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) posed as uninsured customers and surveyed by
phone hundreds of pharmacies in 35 cities across the country to
determine how much uninsured consumers are paying for 10 prescription
drugs commonly used by adults under age 65. We then compared these
prices with the prices the pharmaceutical companies charge the federal
government; with prices at a Canadian pharmacy; and with the results of
a similar survey we completed in 2004. Key findings include:
NATIONAL FINDINGS
• Uninsured Americans pay 60 percent more on average than
what the federal government pays for the prescription drugs we surveyed.
• Regionally, uninsured consumers in the Northeast pay the highest
prices for the 10 drugs we surveyed, followed by the West, South, and
Midwest. Among the cities we surveyed, the uninsured in Boston,
Sacramento, San Francisco, and Hartford (CT) pay the highest prices.
Des Moines has the lowest prices among the cities we surveyed, but
uninsured Des Moines residents still pay 46 percent more than the
federal government for the same drugs.
• Uninsured Americans pay twice as much for drugs purchased at local
pharmacies as they would pay if they purchased the same drugs from a
Canadian pharmacy.
• Compared with our 2004 survey, the cost of the nine prescription
drugs we surveyed increased by 11 percent, 81 percent faster than the
general rate of inflation between 2004 and 2006.
RECOMMENDATIONS
The state PIRGs support the following common sense solutions to the problem of overpriced prescription drugs.
Increase the Availability of Generic Drugs.
Lower-cost generic drugs could save Medicare, Medicaid and consumers
billions of dollars. The state PIRGs support increasing the Food and
Drug Administration’s budget devoted to approving generic drug
applications in order to ease the substantial backlog. We also support
closing loopholes that allow drug makers to hold on to their patents
and slow the introduction of generic drugs to the market.
Establish Prescription Drug-Buying Pools.
The state PIRGs support creating prescription drug-buying pools at the
state and multi-state level to allow individuals, businesses and the
government to use their combined buying power to negotiate lower drug
prices.
Limit Drug Makers’ Marketing Tactics.
Drug makers’ marketing tactics encourage doctors and consumers to
request the newest and more expensive medication, regardless of proof
about its superiority to the older, less expensive drug. The state
PIRGs support limiting direct-to-consumer advertising, restricting
marketing to doctors, and placing strict limits or outright bans on
gifts from drug makers to doctors.
End Secret Deals with Drug Makers.
The state PIRGs support efforts to increase transparency and
accountability for Pharmacy Benefit Managers (PBMs), which negotiate
deals with drug makers on behalf of insurers, state health programs,
and large businesses. These deals are shrouded in secrecy and have led
to lawsuits alleging that PBMs fail to act in their clients’ best
fiduciary interest.
Legalize Prescription Drug Importation.
The state PIRGs support legalizing prescription drug importation as an
interim solution for the millions of uninsured consumers who cannot
afford to purchase their medications in the United States.
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