Today
the Senate passed a bill 25-10 to allow Colorado to join a multi-state
prescription drug purchasing pool, SB-001 by Senator Hagedorn and Rep.
Madden.
American
consumers pay too much for prescription drugs. In 2003, Americans spent
$203.1 billion on prescription drugs, an increase of $20.4 billion from
the previous year. Prescription drug costs increased at more than three
times the rate of inflation from January 2003 to January 2004. The high
price of prescription drugs has helped the pharmaceutical industry
remain consistently profitable, even in a stagnant economy. In 2001, it
ranked first of any industry in rates of return on equity, assets, or
revenues. It has been the most profitable industry in the United States
for the past 10 years. The combined profits of the 10 drug companies in
the Fortune 500 ($35.9 billion) amounted to more than the profits for
all the other 490 businesses put together ($33.7 billion) in 2002.
On
average, uninsured consumers in Colorado pay 77% more than the federal
government for 12 common prescription medications. Uninsured consumers
in Colorado pay twice as much, 102% more, for drugs purchased at their
local pharmacy than they would pay if they purchased the same drugs
from a Canadian pharmacy. “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 Rex Wilmouth, Director of CoPIRG, a
state-wide consumer advocacy group.
Uninsured
consumers carry the full cost of overpriced prescription drugs. The
federal government uses its buying power to negotiate lower prices for
the drugs it purchases for its beneficiaries, such as veterans,
government employees and retirees. Uninsured consumers, with no one to
negotiate on their behalf, pay the highest prescription drug prices not
only in America, but in the rest of the industrialized world as well.
“Prescription drug buying pools are simply good medicine for runaway
health care costs,” said Wilmouth.
“HMOS
and the federal government use their buying power to negotiate fairer
prices for the drugs they purchase,” said Wilmouth. “Unfortunately,
uninsured consumers have no one doing the same on their behalf so drug
companies are making money hand over fist, profiting the most from
chronically-ill Americans without prescription drug coverage.”
CoPIRG
has urged Colorado to apply to be part of a multi-state prescription
drug-buying pool that would allow the government agencies and
individuals to use their combined buying power to negotiate lower drug
prices. States that are pooling their collective purchasing power to
gain deeper discounts include Alaska, Michigan, Vermont, New Hampshire,
Nevada, Minnesota, Hawaii, Montana, Delaware, Missouri, New Mexico,
West Virginia, and Ohio. In 2004, Michigan estimates that it will save
$8 million, Vermont $1million, Alaska $1 million, Nevada $1.9 million,
and Minnesota $11 million. The Hagedorn/Madden bill will allow Colorado
to join other states in a multi-state Rx drugs buying pool.
“This is a practical, time-tested, free market approach to lowering prescription drug costs,” said Wilmouth.
