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Report: Prescription Drug Costs Climbed 9 Percent

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Nov 16, 2009 8:06 pm US/Eastern

Report: Prescription Drug Costs Climbed 9 Percent

PITTSBURGH (KDKA) ― A new AARP prescription report released Monday finds that drug manufacturer prices for widely-used brand name drugs have climbed dramatically, despite a negative general inflation rate.

As part of proposed health care reform legislation, the drug industry is promising to trim $8 billion in drug costs a year for 10 years.

But over the last year according to industry analysts, wholesale prices of many brand name prescriptions have been jacked-up by drug manufacturers by nearly 9 percent.
 
It appears suspiciously as if what the drug industry giveth with one hand - it taketh away with the other.

Lori Kern sees it when she picks up her prescription for insulin.

"I see myself paying out more and it's just getting tougher and tougher," she said.

So does Joe Petrich.

"The drug companies, I've read, where they have two lobbyists for every congressman in the United States Congress and that's costing them billions of dollars," he said.

Elizabeth Scanlon, who has a masters degree in public health, is not surprised.

"I've actually been watching this story unfold for a very long time. And my expectation is that without regulation the pharmaceutical companies are never going to do anything voluntarily," she said.

Pharmacist Bill Reilly says while co-pays remain the same for now, the increases have to be absorbed somewhere.

"Eventually, since the insurance companies are obviously be paying more because the drug companies are charging more, eventually I'm sure that will reflected in the premiums - not in the co-pay of the drugs," he explained.

"The issue that you're investigating here today is an obvious ploy by the drug companies to regain or even exceed the money that they've quote-unquote promised the government," Eric Neishloss, an insurance broker, said.

He believes that if we don't attack the financial aspect of health care reform legislation at the point of where the product is delivered - and that includes drug companies - it won't work.

"The insurance companies can't do it by themselves. Their average profit margin as a health insurance company is only two percent. Where is all the rest of that money going to come from?"

A statement from AARP concluded in part: "The report confirms what most older Americans already know. Drug makers are raising prices and enjoying windfall profits, even as the rest of the economy is suffering. Even as the cost of goods and services drops, a person taking just one brand name drug now pays $200 more per year than a year ago."

KDKA-TV's Mary Robb Jackson did contact a drug industry association about the AARP report, but they never responded.

(© MMX, CBS Broadcasting Inc. All Rights Reserved.)

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