"The United States harbors the world's most sophisticated and successful pharmaceutical industry. Its discoveries have provided some of the nation's and the world's most cost-effective medical miraclesfrom vaccines for childhood diseases to hypertension, cholesterol, and ulcer pills that have eliminated the need for billions of dollars of risky medical procedures. These research investments have also produced some of the world's most expensive drugs, such as Genzyme Corporation's Ceredase for Gaucher's Disease, which can cost $300,000 a year. Genentech's Pulmozyme, a drug for cystic fibrosis victims, costs $10,000 a year. Dr. David Wolf, one of the nation's top hematologists, points out that the drug Levamisole is used to treat dogs for worm infestation. When research found it effective in treating colon cancer in humans, he prescribed it for his patients. But they had to pay one hundred times more than the veterinary price when the cost was jacked up to $1,200 a year for consumption. Most prescription pharmaceuticals cost more in the United States than in any other nation on earth." This is reported by Joseph A. Califano, former Secretarty of Health, Education and Welfare. He adds that the United States is the only industrialized country that does not control prescription drug prices. (9)
Senator David Pryor, Chairman of the Special Senate Committee on Aging, on the subject of ever-rising drug costs, "Any time Congress is critical of the enormous profit margins of the pharmaceutical industry to raise prices in excess of three times the rate of inflation, the industry argues that they need these exorbitant profits and high prices to finance research and development. However, it is clear their well-worn and recycled research and development argument is not going to sell anymore. Consider these facts: Americans are already providing hundreds of millions of dollars in tax breaks annually for the industry's R&D investment. According to a 1991 Forbes Magazine article, the drug industry is spending a BILLION DOLLARS MORE a year on marketing than it is on research; that is, the industry will spend $10 billion on marketing and advertising this year, but only $9 billion on research and development. After accounting for the investment in research and development, the pharmaceutical industry still earns an annual Fortune 500 industry-leading profit of 15.4%. This industry profit average is triple that of the average Fortune 500 club member, which is 4.6%. (10)
"The drug industry says it needs such profits to attract capital. Yet they certainly do not need a return on shareholder investments (return on equity) that industry analysts say is consistently 50% higher than the average Fortune 500 company to attract capital....In addition to the hundreds of millions of dollars in direct research and development tax breaks given to the drug industry each year, a significant amount of research on drug products occurs in federal facilities or with grants provided by federal agencies. For example, most of the research on the drug AZT, used to treat symptoms of AIDS, was conducted at the National Institute of Health (NIH), yet a private drug company holds the patent on the product and has used the patent to charge exorbitant prices for the drug. The drug companies whose R&D investments brought no new breakthrough drugs to market are the very same companies that are increasing prices at some of the highest rates....Drug manufacturers have been increasing prices, on average, at three times the rate of inflation for the last eleven years. (11)
"One of the largest investors in R&DMerckis holding its price increases to inflation. If the world's most research-intensive drug company can adopt this responsible public policy, the others should be able to do the same. In Canada, the drug industry has voluntarily agreed to limit its price increases to the inflation rate, while substantially increasing its investment in research." (12)
If Merck and Canadian drug industries can keep prices down, why are we allowing the majority of pharmaceutical companies in this country to get away with price-gouging, especially when we know that thousands of elderly people are in a financial situation of having to choose between buying food and buying prescription drugs?? We need to make these companies accountable and likewise the congressmen that are enabling them to continue to pocket these huge profits.
We also need to investigate the health care frauds that are helping to raise medical costs across the board. "Health care provides many opportunities for kickbacks for steering business to suppliers, pharmacies or laboratories. A medical equipment supplier might pay off a hospital to get a monopoly on its business, or slip cash to a doctor in return for patient referrals; a pharmacy may pay 'incentives' for a nursing home to steer patients its way; labs may reward doctors for a stream of patient referrals." (13)
"We are buying billions in fraud and abuse. Health industry officials and government watchdogs agree that as much as $100 billion a year is lost through fraud and abuse, including padded bills, charges for tests and procedures never performed and double billing." (14)