How Far Would You Go for Cheaper Drugs?
Thousands of Americans are crossing the border to get the best deal on their prescriptions. Our reporter tags along.
Drug Companies Offer a Caution continued...
Drug prices in America vary greatly depending on who pays the bills.
Insurers and employers pay most prescription costs, but this is changing as
managed care plans impose caps on prescription reimbursements. Some companies
are putting expensive drugs off- limits or reducing drug benefits, requiring
workers to make larger copayments. And people who rely on Medicare, which
serves senior citizens, are on their own, since Medicare does not currently pay
for any outpatient medications.
The growing outcry over high drug costs has forced both political parties to
seek out ways to provide prescription coverage to seniors on Medicare.
Republicans want to offer government subsidies to encourage private insurance
companies to offer drug policies to the elderly. The Democrats would increase
Medicare payments to hospitals and other health care providers, making a drug
benefit part of the program.
But it is state governments, especially those that border Canada, that are
taking the lead on establishing price controls. In May, a law was passed in
Maine -- over industry objections -- that created a commission with the power
to negotiate drug prices for uninsured Maine residents and to impose price
limits in 2003 if drug companies don't lower costs.
In Vermont, a similar bill would have imposed price caps and taken other
steps to make medications affordable. It was defeated after what Vermont House
Speaker Michael Obuchowski called "the most intensive lobbying effort"
that he'd seen in 28 years, mounted by drug companies and the Pharmaceutical
Research and Manufacturers of America (PhRMA), the industry's trade
Sanders, the Vermont Congressman who led drug-buying trips to Canada, says
the issue of high prescription drug prices arouses more anger than any he has
encountered in his career. Last year, he introduced a bill that would allow
American distributors and pharmacists to re-import prescription drugs into the
United States from Mexico and Canada at the lower prices offered there -- as
long as the drugs meet strict safety standards and are approved by the FDA.
"There is simply no reason why Americans should pay up to 10 times more
than people in other countries for the exact same drug," Sanders argues.
Similar legislation was introduced this year in the Senate by Vermont's
Republican Senator, Jim Jeffords.
Who Should Pay for Costs of Drug Research?
The pharmaceutical industry is fighting hard against efforts to allow drug
importation and to control domestic prices. The industry argues that drug
prices are artificially low in other countries and that imposing controls here
would limit the resources drug companies could put into the expensive research
required to develop new drugs. "We totally oppose any form of price
controls because it discourages innovation and investment in research and
development," says Meredith Art, a spokesperson for PhRMA. "The
solution to high prescription drug prices is to add an outpatient drug benefit