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GAO DRUG PRICE ANALYSIS FINDS
HUGE COST JUMP FOR SENIORS, ALL AMERICANS
Senators call for action in Congress this
year on safe re-importation
of medicines, bargaining power for seniors
October 6, 2004
Washington, DC – New information from the non-partisan Government
Accountability Office (GAO) details skyrocketing prescription
drug costs, particularly among brand-name medicines, and is prompting
calls for action in Congress to reduce the cost of drugs for senior
citizens and all Americans. U.S. Senators Ron Wyden (D-Ore.) and
Byron Dorgan (D-N.D.) released the GAO analysis today and pointed
to increases of more than 20 percent in drug prices from January
2000 to June of this year – 26.4 percent for brand-name
drugs – as evidence that legislation demanding bargaining
power for seniors and safe re-importation of medicines should
be addressed in Washington this year.
“These numbers from the
impartial GAO quantify the hurt that American families, and particularly
our seniors, are feeling as spiraling drug costs further bust
their budgets every month,” said Wyden. “The cost
of brand-name drugs is increasing at three times the rate of generics.
America’s seniors and working families can’t wait
until the next session for action from Congress – they need
bargaining power and safe re-importation now.”
“The GAO report makes
clear that this problem, which already threatens the health of
millions of Americans, by placing prescription medicines out of
reach because of needlessly and excessively high prices, is getting
worse, not better,” Dorgan said. “Congress must act
and it must do so soon. Americans urgently need access to lower
priced prescription drugs.”
Among the GAO’s findings:
- The usual and customary price
of medicines, which is the price Americans pay at the drugstore
with no discounts or insurance, rose 21.8 percent for Medicare
enrollees, and 22.8 percent for Americans not using Medicare.
- The price of brand-name drugs
rose at more than triple the rate of generic drugs, increasing
26.4 percent from January 2000 to June 2004, compared to 8.3 percent
for generic drugs during that time period.
Wyden and Dorgan are calling
for action in this Congress on legislation available now to help
seniors and all Americans better afford their medicines.
Earlier this year, Wyden and
U.S. Senator Olympia Snowe (R-Maine) introduced the bipartisan
Medicare Enhancement for Needed Drugs Act (MEND Act) to strengthen
the drug coverage offered to seniors under the Medicare prescription
drug benefit. MEND would grant the Secretary of the U.S. Department
of Health and Human Services (HHS) the specific authority to negotiate
lower prices for drug purchases through Medicare, create incentives
for participating Medicare plans to negotiate the best possible
drug prices, institute penalties on drug manufacturers that try
to limit access to lower price re-imported prescription drugs,
and give Congress and seniors ongoing information about the prices
of prescription drugs across multiple markets.
Dorgan and Snowe are the primary
sponsors of legislation that would allow the importation of lower
priced FDA-approved prescription drugs from Canada, and eventually
other major industrialized countries.
The GAO analysis released today
is the first installment of an ongoing monitoring project requested
by Snowe and Wyden last year to track changing drug prices before
and after implementation of the 2004 Medicare reform bill. The
next stage of the GAO study, due in December, will compare wholesale
and retail prices to understand where and how price increases
occur.
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