Sen. Edward Kennedy (D-Mass.) said the new reports show that the
discounts cards will be of little use to most seniors.

"Seniors need a real break, along with the rest of America, but they
won't get one as long as this administration panders to big drug
companies that overcharge for their prescription drugs," he said.


From The Washington Post, 5/25/04:
http://www.washingtonpost.com/wp-dyn/articles/A54736-2004May25.html

Study: Drug Prices Outpace Inflation

Price Increases Undermine Medicare Discount Card

By Marc Kaufman and Bill Brubaker
Washington Post Staff Writers

Tuesday, May 25, 2004; 1:54 PM

The price of name-brand prescription drugs most used by seniors has
increased by rates substantially above inflation for the past four
years, undercutting the potential value of the new Medicare drug
discount card, two senior advocacy groups reported today.

In a study tracking the prices of 197 of the most widely used
brand-named drugs from 2000 to 2003, the group AARP found a cumulative
increase of 27.6 percent as compared to a general inflation increase
of 10.4 percent.

Analyzing the prices of the top 30 name-brand drugs prescribed for
seniors, Families USA found an increase on average 4.3 times greater
than inflation between January 2003 and January 2004.

The AARP report also found that the price escalation has picked up
during the past four years:

About one quarter of the most-used name brand drugs more than doubled
the general inflation rate in 2000, while 87 percent of those same
drugs doubled the inflation rate in 2003.

The price increases raise the politically sensitive question of how
much seniors will really save by using the Medicare cards, which have
promised discounts of up to 25 percent for brand-name medications when
they go into effect on June 1.

Earlier this year, Health and Human Services Secretary Tommy Thompson
dismissed suggestions that the value of the Medicare discount cards
would be significantly eroded by drug company price increases and said
that all seniors who use the care will benefit financially.

But Ron Pollack, executive director of Families USA, said today that
the drug cards will give little or no help to most seniors because of
the price increases.

"It's the functional equivalent of going to a used car salesman and
being told you're getting a great deal because you got a $3,000
discount," he said.

"Only before you came, he raised the price of the car by $4,000."

As the nation's overall drug budget has increased by double-digit
rates in recent years, the Pharmaceutical Research and Manufacturers
of American has said most of the increase is the result of greater use
of prescription drugs rather than inflation in drug prices.

A spokesman today said the organization is analyzing the two new
reports to determine whether they are accurate and whether they take
into account the sometimes large discounts that manufacturers give to
major suppliers of prescription drugs.

Because those discounts are considered confidential business
information, they are not made public and so cannot be analyzed.

Both AARP and Families USA said they used the published price
manufacturers charge to wholesalers to make their comparisons.

According to Families USA, the price of the five most prescribed drugs
for seniors increased at an especially fast rate last year.

Lipitor, used to lower cholesterol, rose 5.5 times more than
inflation;

blood-clot preventer Plavix increased 5.3 times inflation,

osteoporosis drug Fosamax increased 4.6 times inflation,

blood-pressure medication Norvasc increased 6.6 times inflation and

arthritis drug Celebrex rose by 5.4 times inflation.

And the price increases appear to be continuing.

Last week, for instance, Merck & Co. Inc. acknowledged that it
increased the price of arthritis medication Vioxx 4.8 percent on March
31.

Earlier this year, the AARP asked the drug industry to hold its price
increases to the general rate of inflation.

The group, which was strongly criticized by many members and Medicare
advocates for its support of the Bush administration prescription drug
plan, said its top priority this year is to lower prescription drug
costs.

John Rother, AARP's director of policy and strategy, said the price
hikes are negating the value of the discounts offered by the Medicare
cards.

Assuming the cards offer a 20 percent discount, he said, "it's clearly
true that the discounts really just offset the last three years or so
of price increases."

Pollack of Families USA said the price increases are a particular
burden to the many seniors who won't have the Medicare discount cards.

The Bush administration has estimated that only one in six seniors
will actually get the cards.

Sen. Edward Kennedy (D-Mass.) said the new reports show that the
discounts cards will be of little use to most seniors.

"Seniors need a real break, along with the rest of America, but they
won't get one as long as this administration panders to big drug
companies that overcharge for their prescription drugs," he said.

________________________________________________________

Bush's payback to his campaign contributors continues.

Harry