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Patients Want Solutions To Prescription Drug Costs

Expert: Drug Pricing Intricate, Confusing

POSTED: 1:56 pm EST November 26, 2002
UPDATED: 6:23 pm EST November 26, 2002

This year, Americans could spend as much as $2 billion on prescription drugs.

We're not only taking more medicine than ever before, it's coming with a more potent pricetag.

In the second of our three-part series, NewsCenter 5's Dr. Tim Johnson tells us there are ideas for a cure.

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"I don't remember what it's like not to be sick," multiple sclerosis patient Heather Swimm said.

She was only 15 years old when diagnosed. She now has constant fatigue and vision problems.

"I'm like OK, this is my death sentence. But it's not a death sentence -- it's a life sentence. You have to learn how to keep yourself healthy and control your disease," Swimm said.

That means prescription drugs -- a lot of them. For Swimm, now just 24, five pills every day and one shot each week. The shot alone costs $1,000 a month. Her insurance picks up most of the cost, but her co-pays add up.

"The medication costs are just going to get higher and higher. I mean if I pay $1,000 a year just for prescription costs, by the time I'm 50 I'll pay over $50,000 for prescriptions. That's ridiculous," Swimm said.

One of the reasons the problem has been hard to fix is that the current system of drug pricing is so intricate and confusing. There are many players and everyone can negotiate a different price, mark up the cost an undefined amount, then pass that cost on to you.

"We have a system in which the drug companies sell the product to HMOs and hospitals and government agencies with a rebate, sometimes a big rebate, sometimes a small rebate, but it's all secret," Massachusetts Medical Society President Charlie Welch said.

Take, for example, the No. 1 selling drug in this country -- a cholesterol controller called Lipitor. A NewsCenter 5 investigation found it being sold at a wide range of wholesale prices. We found a pharmacy, a hospital, HMOs and Medicaid all paying different amounts.

The retail price for the consumer without insurance also varied widely.

The scenario, one pharmacist told us, is a little like buying airline tickets online.

"There might be five or 10 different prices a consumer might pay for a given flight from Boston to San Francisco. Similarly with prescription drugs, there are five or six different prices that consumers pay -- there's a hospital price, there's a wholesale price and an average wholesale price. All this is intended to confuse the marketplace," Tufts New England Medical Center spokesman Bill Gouveia said.

The Massachusetts medical society will soon make an aggressive push to standardize drug pricing with a statewide formulary. Welch said that the idea, which was recently passed in Maine, forces drug companies to lower prices. "The state draws up a list of what they consider to be the best drug for all the given purposes. If a drug goes on that statewide formulary, it's the one that's recommended, but it only goes on that list if the drug maker agrees to a steep discount -- in the range of 30 percent," Welch said.

But the few states that have tried to implement this type of plan have faced big legal battles from PhRMA. The Maine case is now before the U.S. Supreme Court.

"Along with price controls automatically comes access restrictions. And we want to be able to make sure patients truly have access to the best medicines, that they be able to have the medicines that their doctor think is best for them, and not to have those decisions made by a bureaucrat or politician," PhRMA spokesman Alan Holmer said.

Dr. Patricia Hopkins agrees that whatever happens, doctors must be in control of what is prescribed -- something that's already difficult as insurers set their own formularies of what is paid for and what is not.

"The baby boomers are all going to be the peak population group in the next 10 years and right now we're floundering? At this point, it's not going to improve," Hopkins said.

"I look forward to a long life, a healthy life. This medication works (but) it has been a huge impact on my life. Prescription costs are too high. I don't think that's right," Swimm said.

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