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Pharmaceutical companies have a lot of explaining to do



Published: Wed, July 3, 2002 @ 12:00 a.m.



The nation's drug companies can no longer attribute the skyrocketing prices of their products to inflation or to the cost of research and development, especially when the price of many drugs whose makers recouped R & amp;D costs years ago have been rising far higher than the rate of inflation.

Providing federal funds, under one plan or another, so that senior citizens can afford the medication they need only further enriches the pharmaceutical industry, rather than calling them to account for profiteering at the expense of those who can least afford it -- and for driving up the cost of health insurance, which, in turn, puts tremendous pressure on the companies and agencies that are paying the cost of insurance. It's time for Congress to demand that the industry explain itself.

Last Friday, Republicans pushed through the House, on a 221-208 vote, a prescription drug bill that would provide the 39 million seniors on Medicare with a limited drug benefit.

Under the plan, seniors would pay monthly premiums of about $33 and a yearly deductible of roughly $250, with the government paying 80 percent of the next $1,000 of drug costs and 50 percent of the subsequent $1,000.

All beneficiaries would pick up the next $1,699, when all additional costs would be covered.

Flaws

The plan has two considerable flaws. The first is that even low-income seniors would still be paying some $3,000 annually in premiums, deductible and copays. While this is clearly a lower cost to the elderly than having no benefit at all, it still burdens those in greatest need, while providing an equal benefit to the most affluent who could afford a higher proportion of all their health care costs.

Our second concern is the bill's open-endedness. So long as pharmaceutical companies are not called to account for their rapidly rising prices, they are essentially being given a blank check. In fact, Pfizer Inc., Eli Lilly & amp; Co. and other drug makers have sued the U.S. government to stop states from steering Medicaid patients toward cheaper medicines so that the companies' profit margin would not be diminished.

We would urge the Senate to call on the drug companies to explain their costs relative to the prices they charge. Since the pharmaceutical industry has fought successful to ban the import of cheaper foreign-made products and the reimportation of American medicines, it should be willing to make some compromises in the interest of the national debt.




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