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The Facts About Prescription Drugs
- America’s Prescription Drug Prices for Seniors are 73%-102% Higher than Canada and Mexico
- Uninsured Seniors and other Americans Pay More for Prescription Drugs than HMOs, Insurance Companies and the Federal Government
- Discriminatory Prescription Drug Pricing Affects Over 50 Million Americans
- Drug Makers are Shamelessly Profiteering on the Backs of Our Uninsured and Elderly
- Ending Price Discrimination Will Not Shut Down New Drug R&D
- Effective Tax Rate for U.S. Drug Companies Much Lower than Other Industries
America’s Prescription Drug Prices for Seniors are 73%-102% Higher than Canada and Mexico
Uninsured Seniors and other Americans Pay More for Prescription Drugs than HMOs, Insurance Companies and the Federal Government
- Many seniors are forced to choose between housing and food or their prescription drugs. Ten percent of Medicare beneficiaries without drug coverage reported not getting a needed prescription because they could not afford it. [HHS, "Prescription Drug Coverage, Spending, Utilization and Prices"]
Discriminatory Prescription Drug Pricing Affects Over 50 Million Americans
- 35% of American seniors lack drug coverage (approximately 14 million). 58% of those individuals live on less than $15,000 per year. [Health Affairs, January/February 1999]
- Almost 25% of Medicare beneficiaries with incomes over $45,000 for a couple have no insurance coverage for prescription drugs. [HHS, "Prescription Drug Coverage, Spending, Utilization and Prices"]
- Although several insurance plans provide some benefit or discount for prescription drugs to its members, there are still 43 million Americans who have no insurance coverage whatsoever. These citizens must pay full retail price for prescription drugs.
- 80% of retired persons take at least one prescription drug per day, and the average Medicare beneficiary used 18.5 prescriptions in 1995. [Health Affairs, January/February 1999]
Drug Makers are Shamelessly Profiteering on the Backs of Our Uninsured and Elderly
- The pharmaceutical industry ranked #1 in profits on all three Fortune 500 indexes - return on revenue, assets, and equity - in 1998. Since 1982, the industry has topped Fortune’s rankings for return on revenue, and has been at or near the top for return on equity. [Stephen Schondelmeyer, Patent Extension of Pipeline Drugs: Impact on U.S. Health Care Expenditures, July 28, 1999, Table 12; Alan Sager and Deborah Socolar, Affordable Medications for Americans: Problems, Causes, Solutions, July 27, 1999, pp. 11-13.]
- A June 1999 report by Merrill Lynch found that a Medicare drug benefit with steep drug price discounts would reduce drug industry sales revenue by just 3.3% because volume increases would offset most of the impact of lower prices.
Ending Price Discrimination Will Not Shut Down New Drug R&D
- The top ten pharmaceutical firms reaped an average of 1.5 times more in profits than they invested in R&D in 1998. The significant price reductions necessary to make a Medicare drug benefit affordable for taxpayers and beneficiaries would still leave this richest industry with healthier than average profit margins and more than enough to fund true research and development.
- The top ten drug companies have spent nearly three times more on marketing, public relations, and administration than they did on research and development in 1999, according to their annual reports to shareholders. The industry defends this spending as serving an educational function for both providers and consumers. The truth is, marketing and advertising is meant to sell drugs.
- The U.S. Government heavily subsidizes research and development. The drug industry enjoys extraordinary government protections and subsides. Much of the early basic research that may lead to drug development is funded by the National Institutes of Health. It is usually only when development of a drug shows promise that the drug companies become involved. The pharmaceutical industry also enjoys 17-year government granted monopolies on their new drugs (patent protection). Once a drug is patented, no one else may sell it, and the drug company can charge whatever the market will bear.
- Common sense dictates that these firms are not going to commit business suicide by curtailing R&D; Brand-name prescription drug companies rely on R&D to make money: it is the source of new patents, new products, and future profits.
Effective Tax Rate for U.S. Drug Companies Much Lower than Other Industries
- A December 1999 Congressional Research Service analysis found that the U.S. pharmaceutical industry, while about three times more profitable on average than other U.S. industries [return on revenue], had an effective tax rate of 16.2% over the period 1993 - 1996, compared to the average rate of 27.3% paid by companies in all other major industries. [12-16-99 News Release by Representative Pete Stark]
- Between 1990 and 1996, the U.S. drug industry received a whopping total of $27.4 billion in U.S. income tax credits. These credits cut the industry’s annual tax bill in these years by about half, ranging from a 47% to a 61% reduction. Five tax provisions produced significant tax savings for drug companies: the foreign tax credit, the possessions tax credit, the research and experimentation tax credit, the orphan drug tax credit, and the expensing of research expenditures. [Calculated from CRS, Federal Taxation of the Drug Industry from 1990 to 1996, December 13, 1999, page 2, Table 1]
Iowa Citizen Action Network (ICAN) is organizing a grassroots effort to lower the cost or prescription drugs, both on the national level and here in Iowa. For more information, contact ICAN at 515-277-5077.
Guidling Principles of Health Care Reform
Iowa Human Needs Advocates is a working group of over 30 organizations that advocate in the human services arena. ICAN and IHNA have drafted guiding principles for health care reform in Iowa.
EVENT
RESOURCES
People or Profits: The Game Show
Iowa Human Needs Advocates is a working group of over 30 organizations that advocate in the human services arena. ICAN and IHNA have drafted guiding principles for health care reform in Iowa.
Learn more and take action here, a web site for consumers who want to join the fight for fair prescription drugs prices.
STATEMENT
ICAN organizer Matt Russell addresses committee members regarding the need for prescription drug price relief in Iowa. Read his statement here.
REPORTS
The Excess Cost of the Bush Prescription Drug Plan in Iowa
Learn about how Medicare Part D wastes Iowa taxpayer money and how we can fix this disasterous plan.
Health Care in Iowa: A Continuing Problem of Access
Iowa Policy Project has released this new report on health care access. One in 11 Iowans falls through the cracks of health-care coverage in Iowa, lacking access to health insurance through an employer or through government services – and despite some recent gains, the percentage of Iowans who are uninsured has not improved from the start of the decade.
Medicaid at 40: A Service That Works, For Americans Who Need It
IOWANS FACE RISING DRUG COST BURDEN: Iowa among the states most affected by rising prescription drug costs. Read entire report here.
MEDICARE CAMPAIGN
How will the Bush Medicare Prescription Drug Law affect your budget in 2006? Click here for a month-by-month cost analysis.
To see Important Facts You Need to Know About the Bush Medicare Prescription Law of 2003, click here.
For a fact sheet about The Medicare Prescription Discount Drug Card, click here.
To see how the discount card costs compares unfavorably to VA, Canada, and drugstore.com, click here.
Medicare Worksheet - to estimate what you will have to pay in 2006 for prescription drugs, download and print this worksheet.
NEWS FROM THE ROAD
Medicare Road Show Picks Up Steam in the Midwest, April 13, 2004: Des Moines, Iowa.
PRESCRIPTION DRUG BENEFIT Q & A
The new Medicare law is extremely complicated and extremely politicized. Click here for a question and answer resource from FamiliesUSA that can help you better understand the effects of this law.
HEALTH CARE PRINCIPLES
These principles are the cornerstone of a quality health care system. Any health care proposal must bring us closer to meeting them.
JOINT STATEMENTS
A coalition of groups demands that Senator Grassley protect Medicaid funding. Read the letter here.
Joint statement on the effects of the Prescription Drug and Medicare Improvement Act of 2003
REPORT
Congress’ Prescription Deal Costs Iowans More and Undermines the Entire Medicare System. Released 11/18/03 by ICAN and the Institute for America's Future. Click here.
FACT SHEETS
The Medicare Part D Disaster: Extend the May 15 Deadline
State Rx for 2005: House File 152
Our Fight for Fair Prescription Drug Prices
Capping Medicaid Funding: How Block Grants Would Hurt States -- Families USA, December 2004
Comparing the Medicare prescription drug proposals: Senate, House, and Conference
Iowa State Prescription Fact Sheet
IN THE NEWS
3/25/06, Des Moines Register: Drug-benefit cost: A whopper
3/22/06, Radio Iowa: Group seeks changes in Medicare prescription drug benefit
09/27/05, Quad City Times: Putting a face on budget plight
09/20/05, Des Moines Register: Hearings planned on cuts to social programs
08/13/05, Quad City Times: Letter to the editor -- Health care coverage still a major concern
08/10/05, Des Moines Register: Editorial -- Everyone deserves health-care coverage
08/04/05, Newsradio 1040 WHO: Medicaid Turns 40
07/16/05, Vilsack touts Medicaid effort as national model to fellow governors
PRESS RELEASES
04/20/06 - Extend the May 15 Deadline to Sign Up for Prescription Drug Benefit
