A health-care consumer group has accused drug companies of price gouging by raising the prices of the most commonly prescribed drugs far above the rate of inflation or production costs.
"Prescription price gouging is America's other drug crisis," Ron Pollack, executive director of Families USA, said Thursday."Drug company lobbyists say skyrocketing drug prices reflect research needs, but the truth is that their pricing policies reflect nothing but greed," he said in releasing a report on drug prices.
Sens. David Pryor, D-Ark., and William Cohen, R-Maine, leaders of the Senate Special Committee on Aging, agreed the report indicates a serious economic threat to the nation's elderly.
The report said the top 20 prescription drugs purchased by the nonelderly rose in price by 82 percent from 1985 to 1991, almost quadrupling the 21 percent increase in general inflation, and the top 20 drugs purchased by the elderly rose in price by 79 percent over the same period.
The report cited the example of Naprosyn, an arthritis medicine, which was raised in price 10 times during the period studied. The price of Lopressor, a blood pressure pill, was raised nine times, the report said.
"The success of these greed-based pricing policies is reflected in the astronomical excess profits of the makers of the top 20 drugs," Pollack said. "Every year we studied, the profits of the makers of the top 20 drugs dwarfed the profits of America's Fortune 500 corporations."
"If these excess profits were going into research, some good might have come of it," Pollack said. "But the truth is that little of this money goes into research."
According to the drug companies' own figures, they put more money into advertising, promotion and lobbying than research.
Pryor said the report is further evidence that legislative reforms are necessary to slow the "reckless and relentless prescription drug price increases" of the past decade.