FRIDAY, Jan. 27, 2006 (HealthDay News) -- The latest wonder drugs are helping keep cholesterol numbers low, mood high, pain at bay and sexual prowess strong, among other things.
But with the prescription drug costs reported to be rising at twice the rate of inflation, many Americans are feeling the pain in their pocketbooks, instead.
"These drugs do help a lot of people -- that's why it's such a shame that they are so expensive and out of reach for so many," said Dee Mahan, deputy director of health policy at Families USA, a nonprofit consumer advocacy group based in Washington, D.C., that has long lobbied for lower drug prices.
"Prices are much lower in other countries," Mahan said. "You can't help but feel as an American that you're getting gouged with the prices here."
But Jeff Trewhitt, a spokesman for the industry group Pharmaceutical Research and Manufacturers of America (PhRMA), begged to differ.
"The critics have done a good job of distorting the cost record," he said. "The fact is, prescription drugs (including generics) account for about 11 percent of each health-care dollar, with hospitals, doctors, surgeries, the cost of medical equipment and other expenses accounting for the remaining 89 cents."
Furthermore, Trewhitt said, the disease-management powers of many of these drugs -- such as cholesterol-lowering statins or antidepressant SSRIs -- are actually saving the health-care system (and consumers) "billions of dollars" as they prevent expensive, acute care such as hospitalizations and surgery.
"For example, the average cost of an anti-ulcer drug is about $900 a year," Trewhitt said. "When a patient takes the medicine and [thereby] avoids the surgery, he avoids paying an average of $28,000 for the operation. The average cost of a heart disease drug is $1,200 a year, compared to an average of about $42,000 for coronary artery bypass surgery."
Mahan said she doesn't dispute either of Trewhitt's points, although she believes the share of prescription drugs in health-care spending is "a little higher" than the 11 percent he cited.
She agreed that many expensive new medications are saving lives and keeping users from having to undergo even costlier interventions.
"But that's exactly why we think it's incredibly important that people be able to afford these products," Mahan said. "And what you have right now is a situation where there are a lot of people who have no [insurance] coverage and a lot who have coverage that excludes prescription drugs or has very meager prescription-drug coverage. So the cost of these products hits people very hard."
Some facts: According to AARP's latest "Rx Watchdog Report," issued in August, prices for 195 of the most popular brand-name medications rose by 6.6 percent between the spring of 2004 and the spring of 2005 -- more than double the 3 percent annual rate of inflation.
Overall, AARP estimates that the typical older American taking three prescription medications now spends an average $866 more per year for his or her drugs than five years ago.
At the time of the report's release, PhRMA's senior vice president Ken Johnson said in a statement that the AARP used "fuzzy math in reaching its flawed conclusions."
According to Trewhitt, "Today's pharmaceutical price increases, which are at near decade-low levels, are in line with those of other health-care services, which aren't as cost-effective."
He believes the real problem lies in the growing ranks of America's uninsured.
"Today, about 45 million Americans lack adequate insurance or any insurance," Trewhitt said. "They often pay cash on the barrelhead for medicines at retail pharmacies and they don't have anyone negotiating good discounts on their behalf."
Again, Mahan agreed -- and disagreed. "We certainly do have too many people without coverage -- I'm not arguing with him on that one," she said. But she countered that health plans are cutting out prescription-drug coverage precisely because prices have soared so high.
Barring a voluntary price rollback from industry, her group is lobbying for some sort of federal price controls as occurs in Europe and Canada. And while industry representatives say such controls could hurt research and development, Mahan said she isn't buying it.
"We've looked at profits and spending patterns in pharmaceutical companies and what you see consistently is that R&D is well overshadowed by spending on marketing, advertising and administration," she said. "It's also well overshadowed by profits."
Price controls in the United States do seem only a remote possibility, however, and in the meantime both Trewhitt and Mahan advise consumers to shop carefully, using all the discount plans and comparison shopping at their disposal. There's also the much-anticipated Medicare drug benefit for those over 65, set to kick off in January.
Both sides agree that most of the highly popular, expensive prescription drugs are improving people's lives.
"I spend a lot of my time at my work trying to get policy changes that would help people access affordable drugs," Mahan said. "If I didn't think the drugs were good and worth it, I'd be doing something else."
More information
For more on rising drug prices, head to the AARP.
