Your Money or Your Life
Is any of this true? Well, the first part certainly is. Prescription drug costs are indeed high – and rising fast. Americans now spend a staggering $200 billion a year on prescription drugs, and that figure is growing at about 12 percent a year (down from a high of 18 percent in 1999).
Drugs are the fastest growing part of the health care bill – which itself is rising at an alarming rate. The increase in drug spending reflects, in almost equal parts, the facts that people are taking a lot more drugs than they used to, that those drugs are more likely to be expensive new ones instead of older, cheaper ones, and that the prices of the most heavily prescribed drugs are routinely jacked up, sometimes several times a year.
Before its patent ran out, for example, the price of Schering Plough’s top-selling allergy pill, Claritin, was raised thirteen times over five years, for a cumulative increase of more than 50 percent – over four times the rate of general inflation.
As a spokeswoman for one company explained, “Price increases are not uncommon in the industry, and this allows us to be able to invest R & D. In 2002, the average price of the fifty drugs most used by senior citizens was nearly $1500 for a year’s supply. (Pricing varies greatly, but this refers to what the companies call the average wholesale price, which is usually pretty close to what an individual without insurance pays at the pharmacy.)