Rhode Islanders without prescription coverage pay an average of 79 percent more for 12 common drugs than the best available market prices, and more than twice as much as most of those drugs would cost in Canada, a consumer group says in a new report.
The Rhode Island Public Interest Research Group released the data on the eve of the state Department of Health’s final hearing on regulations to license Canadian pharmacies to sell to local residents. RIPIRG backed the measure, which was approved Dec. 30.
But importing drugs is only a small part of RIPIRG’s proposals to reduce the “huge” cost of prescription drugs. The group, part of a national network, is also pushing for a state (or interstate) drug-buying pool, legal reforms to increase the availability of generic drugs, development of “preferred drug lists” based on evidence on drugs’ effectiveness, and much tighter regulation of drug manufacturers and pharmacy benefits managers.
“The need for state and federal action to lower drug prices has never been greater,” says the report, which is available at www.ripirg.org.
RIPIRG is not alone in its position: At the unveiling of the drug report, advocates were joined by representatives of Ocean State Action, the Gray Panthers, Senior Agenda, the Rhode Island Medical Society, and Rhode Island for Health Care.
The uninsured are “being gouged for incredible amounts,” said Marti Rosenberg, of Ocean State Action. The Bush administration “isn’t going to go near” the price controls Americans need, she added, but state legislatures can make the difference, and so can consumers, with “the power of the people” exerting financial pressure and speaking out.
This is RIPIRG’s second study of prescription drug prices. The first, issued in July 2003, found that Providence consumers paid 72 percent more for 10 common drugs than the federal government, but it was a different list of drugs.
The two drugs included in both years’ surveys – Lipitor and Zocor – both got more expensive, by 4 percent and 40.6 percent, respectively, for Providence consumers, but because the federal government took even bigger price hikes, the price gap actually narrowed.
The RIPIRG report, which combines industry data, government studies and analyses by groups critical of pharmaceutical companies, focuses on the prices paid by consumers who don’t have the benefit of prescription coverage – or of the discounted prices insurers get.
The actual price that, say, Blue Cross & Blue Shield of Rhode Island pays CVS, Brooks or your neighborhood pharmacy for each drug is not publicly available; the contracts negotiated by pharmacy benefits managers are kept confidential. Plus there are two layers to the price difference: Pharmacists charge less, but drug manufacturers also provide rebates. For the roughly 52,000 Rhode Island state workers, retirees and dependents it covers, for example, Blue Cross estimated that it would get $2 million in rebates in 2005.
Lacking insurers’ data, RIPIRG used the prices paid by the federal government, adding a $6.40 dispensing fee per prescription (almost double what local pharmacies actually get from insurers). But while the figures may vary from public to private sectors, pharmacists openly acknowledge that they charge cash customers more.
“It’s economies of scale,” said Jack Hutson, executive director of the Rhode Island Pharmacists Association, which has teamed up with the Pharmaceutical Research and Manufacturers of America (PhRMA) to fight against Canadian drug importation.
Most activists trying to lower U.S. drug prices blame PhRMA’s members for the high prices at the retail end, but in an interview, Hutson sidestepped that issue. Instead, he criticized insurers and pharmacy benefits managers, who, with their massive
buying power, “have just ground down pharmacies to a margin that they’re just hanging on by their fingernails.” Struggling to survive, stores can’t afford to lower prices for consumers.
“That’s just the realities of business,” Hutson added. Consumers who pay cash get “whatever the going rate is,” he said. There are programs available to help the poor and elderly get free or discounted drugs, he said, and others may have to find cheaper options.
“I would love to drive a Mercedes – great car, can’t afford it,” Hutson said. “And people accept that as a reality: You can’t afford it, so you don’t drive it. When it comes to health care, there seems to be a whole different set of rules.”
Yet pharmacists do seem to be trying to help consumers, the Public Research Interest Group survey found. Researchers called 468 stores in 19 states and the District of Columbia, identifying themselves as uninsured consumers shopping around for the best prices, and found pharmacists were “very helpful,” and offered plenty of advice on ways to save.
Nevertheless, the quoted prices were steep, RIPIRG says: A month’s supply of Lipitor, for example, averaged $80.68 – compared with $47.05 charged to the federal government, and $47.40 charged by Canadian pharmacies on a Web site sponsored by the state of Minnesota. The birth control pill Ortho Tri-Cyclen cost $41.59, compared with $18.72 for the federal government and $19.12 at the Canadian pharmacies.
Overall, Providence uninsured consumers would pay 44 percent to 164 percent more than the federal government, RIPIRG found, and 43 percent to 338 percent more than in Canada.
