Uninsured Pay More for Drugs, Study Finds

July 15, 2003
Uninsured consumers in the Washington, D.C. area are charged 80 percent more for 10 common prescription drugs than the best available market prices, according to a survey released today by U.S. PIRG. The survey found that, nationally, uninsured consumers were charged 72 percent more on average for 10 common prescription medications than the federal government.

The group criticized most leading administration and Congressional reforms in favor of better alternatives such as urging state governments to establish prescription drug buying pools and urging Congress to enact legislation requiring testing of the effectiveness of differently-priced drugs and eliminating barriers to lower-cost generic alternatives for high-priced prescription drugs.

"When the 41 million uninsured Americans go it alone at the drug store, they pay the price -- sometimes more than double what government agencies pay to buy the same drugs in bulk for large groups of consumers," said U.S. PIRG Consumer Program Director Ed Mierzwinski.

"HMOS and the federal government use their buying power to negotiate fairer prices for the drugs they purchase," continued Mierzwinski. "Unfortunately, uninsured consumers have no one doing the same on their behalf so drug companies are making money hand over fist from chronically-ill Americans without prescription drug coverage."

Using a list of ten frequently prescribed medications, U.S. PIRG and the state PIRGs surveyed more than 500 pharmacies in 18 states and the District of Columbia to determine how much more uninsured consumers are charged for these medications compared to one of the pharmaceutical industry's "most favored" customers, the federal government.

Among the key findings are:

• On average, uninsured consumers in Washington, DC and the northern Virginia cities of Arlington, Alexandria and Fairfax are charged 80 percent more for the 10 common prescription medications than the federal government.
• Uninsured DC consumers paid more than double the federal supply schedule price for several surveyed drugs, including the popular, and expensive, anti-cholesterol medication, Zocor. DC area consumers paid $146.71, or 116 percent more than the federal supply schedule price of $67.81 for a month's supply of Zocor.
• Nationally, uninsured consumers pay 72 percent more on average for the 10 common prescription medications surveyed than the federal government.
• Of the major metropolitan areas surveyed, the four most expensive cities in which to buy prescription drugs were Baltimore, Washington, DC, Philadelphia and Boston.

In June, both the House and Senate passed versions of the Bush administration's Medicare reform bill that would establish a prescription drug benefit for Medicare recipients. The bills require recipients to join regional private health insurance plans to obtain the new drug benefit.

"These bills fail to address the skyrocketing cost of prescription drugs and do nothing to help the millions of Americans without prescription drug coverage who do not qualify for Medicare," said Mierzwinski.

U.S. PIRG called on Congress to enact bi-partisan proposals such as the Prescription Drug Comparative Effectiveness Act (H.R. 2356) sponsored by Rep. Tom Allen (ME) and Rep. Jo Ann Emerson (MO), which would require federal agencies to study the cost-effectiveness of different drugs used for the same treatment. Similar legislation has already been enacted in Oregon, Mierzwinski said.

"PIRG's report is a timely reminder that pharmaceutical companies charge the highest prices in the world not only to seniors but to any American who lacks prescription drug coverage," said U.S. Representative Tom Allen (ME).

"This price discrimination forces many of our nation's most vulnerable consumers to pay full price for their medications without the leverage over price that those with private health insurance, including federal employees and Members of Congress, receive. The Medicare bills just passed by the House and Senate actually forbid the federal government from negotiating lower prices for seniors," concluded Rep. Allen.

U.S. PIRG also urged enactment of the bi-partisan Greater Access To Affordable Pharmaceuticals Act (HR 2491/S 54) to close the loopholes that allow drug companies to block lower-priced generic versions of their drugs from reaching the marketplace. A version of that bill has been included in the Medicare reforms, noted Mierzwinski.

"Prescription drug buying pools are simply good medicine for runaway health care costs," concluded Mierzwinski.

U.S. PIRG is the national advocacy office for the state Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy organizations.