Paying the Price: The High Cost of Prescription Drugs for Uninsured Americans
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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