Two studies prove the sad truth about who is paying extortionist prices for their prescription drugs.  I asked the Democratic staff of the Government Reform Committee to compare the amount of money paid by Medicare beneficiaries who don't have prescription drug insurance coverage with the costs charged to the drug companies' most favored customers – HMOs, insurance companies, the Veteran's Administration, etc.  They looked at the five prescription drugs most often used by the elderly.  I was startled to find that these senior citizens and persons with disabilities were paying a whopping 114% more on average for their drugs than the most favored customers.  That's right.  The people who most need medications and who can least afford them are being gouged by the pharmaceutical companies.  The study confirmed, by the way, that your local drug store is not causing those high prices.  

If you are without a prescription drug benefit, you won't be surprised by this example.  An insured patient fills his prescription for Zocor, a cholesterol drug produced by Merck.  The cost is $34.80.  A 75 year old woman without insurance is charged $105.75 for the same drug, same amount, same everything, except same price.  She is paying 204% more!  Is it any wonder that she may just put her doctor's prescription in a drawer, or cut the pills in half, or take only one or two pills a week, or forgo the fruits and vegetables that she needs to eat, or not pay her heat or electric bill?  These are the unhappy options faced by a growing number of frail Americans. 

Our senior citizen might be wise to pack a bag and make a special trip to Canada or Mexico – not to vacation, but rather to buy her drugs.  The second study I commissioned compared the prices charged for the same frequently used drugs and found that they cost 83% less in Canada and 81% less in Mexico.  I don't mean the Mexican or Canadian version of those drugs or a generic brand.  I mean the exact same drugs – same manufacturer, same packaging, same quality.  The Zocor that she purchased for $105.75 around the corner will cost $46.17 in Canada, a 129% savings, and $67.65 in Mexico, a 56% savings.  If she and her friends could scrape the money together to make the journey, it could be worth it.  Travel agents take note!

Ask the drug companies how they justify this discriminatory pricing, and they will tell you that any decrease in the cost of drugs will result in their inability to do the research and development necessary to bring new lifesaving medications to market.  What bunk!  This is the most profitable industry in the world, exceeding the profits of the Fortune 500 by 2.3 times.  The investment company of Merrill Lynch, responding to concerns about legislation that could lower drug prices, predicted that a 25% reduction in prices would barely affect profits, according to Merrill Lynch.  Besides, a look at their books proves that far more money is spent on advertising than on research and development.  And some of what they call research, is marketing research or research into boutique kinds of drugs for an upscale market.

As a member of the U. S. Congress, I hear from people every day who simply can't afford the medications that they need to keep them well, or in some cases, alive.  I tell them about proposals that I am supporting that would really help them.  I am one of 137 members of the House of Representatives sponsoring a measure that would allow pharmacies to purchase drugs for Medicare beneficiaries at the same low prices available to the Federal government and other favored customers, including HMOs and insurance companies.  This legislation, HR 664, would reduce drug prices by about 40%.  As you can imagine, the wealthy drug industry is fighting us tooth and nail, or should I say dollars and cents, showering members of Congress with contributions.  They're far more worried about those top executive salaries than they are about poor seniors.  

President Clinton had it right when he proposed prescription drug coverage as a Medicare benefit.  The drug companies are opposing that too, even though more taxpayer dollars would go to them.  They're worried that Medicare coverage will lead to price controls – and if we have half a brain, it will.  The pharmaceutical giants paid an attractive older woman they call "Flo" to appear in TV and newspaper ads warning senior citizens to "keep government out of my medicine cabinet."  Speaking for myself, I want the government in my medicine cabinet making sure that the medicines I take are safe and effective.  And I sure wouldn't mind it if government forced those greedy drug companies to lower their prices. 

Sure the drug companies are rich, but that doesn't mean that they get to call all the shots.  As a long time organizer and activist and an elected official for nine years, I am telling you on good authority that people power trumps the money every day of the week.  If we want lower drug prices, we can have them.  The battle is just beginning.  I'd love to know what you think about this.  Contact my Chicago office at 5533 N. Broadway, 773/506-7100 or email me at jan.schakowsky@mail.house.gov.