No Relief for Rising Drug Costs

AARP – the powerful seniors' organization that provided critical support for the Bush administration's flawed prescription drug bill – announced yesterday that prescription drug prices have increased three times faster than inflation over the past four years. In a fitting irony, AARP concludes that rapidly rising drug costs are now estimated to wipe out the minute savings estimated under the new prescription drug laws it promoted. Rest assured, while seniors suffer from rising drug costs, the pharmaceutical and drug card companies supporting President Bush will profit handsomely under the new system.

• Rising drug prices are a direct result of the pharmaceutical industry's heavy spending on lobbying, advertising, and political contributions. Drug prices do not rise three times faster than inflation because of research spending. As one of the most profitable industries in the United States, pharmaceutical companies are keeping drug prices artificially high to maintain profits and fund its network of political and public manipulation and generous campaign donations to the president and his cohorts.
• The new Medicare changes provide scant benefits to seniors. A recent study by the minority staff of the House Government Reform Committee found that a month's supply of the 10 most popular brand name drugs cost less at online pharmacies than if purchased in one of three new Medicare drug card plans set to begin in June. Similarly, a new study by Families USA found that prices for popular drugs available under the new drug card plan are still much higher than prices for the same drugs under the Veterans Administration and Canadian drug purchasing systems.
• Health care companies are allowed to charge whatever they want for drugs under the new plan. The new plan forces seniors to pay up to $30 to enroll in a drug card plan with no flexibility. Although seniors are not allowed to switch plans until 2005, drug card companies are free to raise or lower prices weekly.

Daily Talking Points is a product of the Center for American Progress, a non-partisan research and educational institute committed to progressive principles for a strong, just and free America.