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, high
prescription drug prices are a problem for
Americans of all ages, not just the elderly.
As prescription drug prices have increased, so has the number of uninsured and
underinsured Americans. In 2003, 45 million Americans under the age of 65 did
not have health insurance; millions more with health insurance lacked prescription
drug coverage. Young adults (ages 19 to 34) accounted for 40 percent of the
non-elderly, uninsured population in 2003. Meanwhile, the pharmaceutical industry
continues to record enormous profits, often by blocking consumer access to equally
effective but less expensive medication.
Uninsured consumers carry the full cost of overpriced 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. In addition, consumers with health insurance coverage pay only a portion
of the discounted price negotiated by their insurance company. Uninsured consumers,
with no one to negotiate on their behalf, pay the highest prescription drug
prices not only in America, but in the rest of the industrialized world as well.
In late summer of 2004, the National Association of State Public Interest Research
Groups (PIRGs) conducted a survey of more than 400 pharmacies in 19 states across
the country and Washington, DC to determine how much uninsured consumers are
paying for 12 prescription drugs commonly used by adults under age 65. We then
compared these prices with the prices the pharmaceutical companies charge one
of their “most favored” customers, the federal government, and
also with the prices paid by consumers in Canada.
Our survey showed that the
uninsured pay a huge price for prescription drugs, especially when compared
with the prices
paid by the federal government and our neighbors to the north. Key findings
include:
In San Antonio, Texas:
- On average, uninsured consumers in San Antonio pay 70 percent more than the
federal government for 12 common prescription medications.
- Uninsured consumers in San Antonio pay 74 percent more for Zithromax than
the federal government pays for the same prescription. Zithromax is an antibiotic
commonly used to treat pneumonia and other infections.
- On average, uninsured
consumers in San Antonio pay almost twice as much—95 percent more—for drugs
purchased at their local pharmacy than they would pay if they purchased the
same drugs from a Canadian pharmacy.
Nationally:
- Uninsured Americans pay 78 percent more on average for 12 common prescription
drugs than the federal government pays for the same medications. The price differences
range from 41 percent more for Ambien, a sleep aid, to 162 percent more for
Synthroid, which treats thyroid disorders.
- Many of the drugs featured in the PIRG survey treat chronic conditions – meaning
that even small savings add up quickly. An uninsured person regularly taking
Allegra to control his/her allergies, for example, would pay at least $1,120
for a year’s supply. The federal government, on the other hand, would pay on
average $657 for the same quantity of Allegra – a savings of $463.
- Uninsured Americans, on average, pay twice as much as Canadians—105 percent
more— for nine of the common prescription medications we surveyed. The price
differences range from 45 percent more for Norvasc, which treats high blood
pressure, to 530 percent more for Premarin, a necessary hormone treatment for
millions of women.
- An uninsured woman regularly taking Premarin would pay at least $465 for a
year’s supply in the United States. A
woman purchasing her year’s supply of Premarin from a Canadian pharmacy
would pay just $74—a savings of $391.
The need for state and federal action to lower drug prices has never been greater.
Although federal lawmakers are aware that Americans pay the highest prescription
drug prices in the world, they have yet to take substantive action to address
the problem. Frustrated by inaction at the federal level, states across the
nation are taking on the task of providing their uninsured and underinsured
citizens with access to affordable prescription drugs. The state PIRGs support
a range of strategies to lower the cost of prescription drugs that include:
- Creating prescription drug-buying pools at the state level that would allow
businesses, the government and individuals of all ages to use their combined
buying power to negotiate lower drug prices, similar to what the federal government
and big HMOs do;
- Expanding the use of preferred drug lists (PDLs), which provide state governments
with information about the
most cost-effective treatment for a particular condition. State governments
can use PDLs to make purchasing
decisions that ensure patients get the most affordable and most effective treatment
possible;
- Increasing scrutiny of pharmaceutical benefit managers, the pharmaceutical
“middlemen” who manage the prescription drug care for millions of
Americans under a veil of secrecy and often act against their clients’
best interests;
- Regulating the marketing practices of pharmaceutical companies that drive
up the prices of prescription drugs and
encourage patients and doctors to favor the newest and most expensive drugs
regardless of their effectiveness; and
- Providing consumers with immediate price relief by legalizing the importation
of lower-priced prescription drugs from
Canada and other countries with drug regulatory systems similar to ours as a
stopgap measure until comprehensive
reform passes.
|
 Download the full report.
|
