Groups challenge presidential candidates to "Get On the Bus" with seniors to Canada
February 2000

CONCORD, N.H.--Thousands of New Hampshire seniors are being price-gouged when they purchase prescription drugs, according to a new study by the national consumer group Public Citizen, the New Hampshire Citizens Alliance for Action and the New Hampshire Association for the Elderly.

The study surveyed 30 local pharmacies and compared the prices of the 10 most commonly prescribed drugs used by senior citizens. The survey showed that New Hampshire seniors without prescription drug coverage are being charged retail prices that are more than double--103 percent higher on average--the prices that prescription drug makers charge their most favored customers, such as HMOs, large insurers and federal agencies.

Overall, the average senior's retail price for each of the 10 drugs was $183 versus $89 for the most favored customer. Overcharges ranged from 51 percent for the ulcer drug Pepcid to 246 percent for the cholesterol drug Zocor.

"This price-gouging is outrageous and intolerable," said Bob Stauffer, program director of the New Hampshire Association for the Elderly. "Many seniors have retired on fixed incomes and can't afford to pay for the prescription drugs they need to stay alive and well."

In addition to releasing the report, the groups challenged the presidential candidates campaigning in New Hampshire to join them on a Jan. 18 bus trip to Canada with seniors who will cross the border to buy their medications at substantially reduced prices. The groups also challenged the candidates to support the leading prescription drug bill in Congress, the "Prescription Drug Fairness for Seniors Act" (H.R. 664/S. 731), sponsored by Rep. Tom Allen (D--Maine).

"Why are New Hampshire seniors paying so much more than seniors in Canada for the exact same drugs?" asked Ann Crowley, from the New Hampshire Citizens Alliance for Action. "Who is representing the interests of America's seniors? It's about time that the presidential candidates do something about this problem by getting on the bus with the brave seniors who are going to Canada to purchase affordable drugs, and by supporting the Allen bill."

The Allen bill would end price discrimination and let the millions of seniors and disabled Americans on Medicare use their bulk buying power to receive fair prescription drug prices. It would require pharmaceutical manufacturers to give local pharmacies the same "best" price for Medicare beneficiaries as they give their most favored customers. The groups consider the bill to be a necessary step towards adding a comprehensive prescription drug benefit to Medicare that is affordable for seniors and for taxpayers.

"Older Americans should not have to choose between buying medicine and food, between paying their electric bills and their drug store charge accounts, between purchasing the drugs their doctors prescribe and living in pain and anxiety," bill sponsor Allen said. "President Clinton has said that we need 'a drug benefit our seniors can afford at a price America can afford.' The Prescription Drug Fairness for Seniors Act can make prescription drugs much more affordable for older Americans and the price of a prescription drug benefit under Medicare more affordable for America."

The pharmaceutical industry has argued that high U.S. retail prices are necessary to fund research and development (R&D). But the study shows that profits are a higher priority for drug manufacturers than R&D. The prescription drug business was ranked the most profitable industry in 1998 by Fortune Magazine--even after R&D costs were considered. Despite these high profits, the prescription drug industry pays much less in federal taxes than other major industries, according to a new study by the Congressional Research Service. Moreover, CEOs of the top 10 pharmaceutical companies last year averaged $20 million each in annual compensation, including stock options, and together held nearly $1 billion in stock options.

"The pharmaceutical giants are generating their profits on the backs of New Hampshire's seniors," said Frank Clemente, director of Public Citizen's Congress Watch. "The profit rate of the top 10 drug companies was 38 percent last year, more than double the average of all other Fortune 500 industries. They make these unnaturally high profits by charging their highest prices to senior citizens who can't do without their products."

Russell and Suzanne Woodard of Pierpont, N.H. spoke about high prescription drug prices. They spend nearly 28 percent of their monthly income of $1,400 on prescription drugs, including Lipitor, one of the drugs in the survey. The Woodards participated in a September bus trip to Canada with the crew of 60 Minutes, paying $420 less than they would have paid for the same drugs in the U.S. When they can't afford to pay for a prescription, they cope by reducing their daily dosage or delaying filling the prescription. "Right now, we exist," Russell said. "We pay our bills from day to day."

For more information about Public Citizen's Campaign for Affordable Prescriptions, check out www.citizen.org/congress/drugs/home.htm.

Public Citizen is a national membership organization of 150,000, with more than 800 members in New Hampshire. It was founded by Ralph Nader in 1971 to protect the rights of consumers. Joan Claybrook is its president.

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