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Drugs for Seniors: A Costly Problem

No. 7 of the Top 10 Stories of 2004: More people are living longer, and that means more people rely on prescription drugs to help maintain their quality of life. As demand keeps rising, so do prices. What is the solution?

WebMD Feature

If prescription drug affordability were measured in headlines, 2004 would have been a windfall year for American seniors. Congress fought over drug reimportation legislation. Consumer groups hammered away at drugmakers for high prices. President George W. Bush and Sen. John Kerry battled over whether Medicare should have the right to negotiate lower prices on behalf of seniors.

Of course, prescription drug prices are measured in dollars, not headlines. And for all the wrangling and debates coming out of Washington, the bottom line is that most seniors paid substantially more for drugs this year than they did in 2003.

The typical American senior taking three prescription drugs paid $175.56 more for medications over the 12 months ending in September 2004 than over the previous year, according to the most recent figures available from AARP. Of the 197 most-used drugs by elderly patients, 161 went up in price during that time, making the chances very good that you're paying more for your treatments than you did in 2003.

Price hikes were not limited to seniors without private prescription drug coverage. More than half of 333 large companies raised premiums and co-payments for retirees with company-sponsored prescription drug plans in 2004, according to a Kaiser Family Foundation survey released in December.

It is true that Washington did make some progress in 2004. Medicare launched its prescription drug discount card program, which is offering 15% to 30% savings off of retail prices on some drugs. Low-income seniors can save a lot more if they take advantage of the program's $600-per-year credit. The agency also started offering average price comparisons for popular drugs in an effort help consumers shop smarter and hopefully spur drugmakers to lower prices.

But even the Medicare prescription drug discount card program was branded a disappointment by many observers. Just 5.8 million of Medicare's 40 million eligible beneficiaries -- one in seven -- have signed up for the cards. Analysts say that figure reflects seniors' confusion in navigating the program's dozens of options.

Millions of Americans have looked to Canada and Europe in an effort to find lower prices. While the practice still remains technically illegal, regulators have largely turned a blind eye to consumers who import a 90-day supply or less by crossing the border or ordering medications over the Internet.

Congress has fought for years over measures that could make it legal for Americans to buy lower-cost, popular prescription drugs from other industrialized nations, and 2004 was no different. A federal task force lead by the surgeon general recently completed a report on the safety and feasibility of allowing importation, though it has not yet released its findings.

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, says that U.S. drugmakers continue to consider importation "a risky game" and that his group expects the task force to brand it unsafe. "We hear that it may well go that route," he says.

Next year, Medicare will start sharing drug costs with beneficiaries. Benefits vary according to your income and how much you spend, but the plan should cut overall drug spending by about half for the average senior. Low-income seniors qualify for additional subsidies and will wind up paying far less.

The problem is that the new Medicare benefit, known to policy makers as "Part D," doesn't kick in until Jan. 1, 2006. That leaves seniors with one more year to figure out how to minimize the impact of prescription drug prices that are nearly guaranteed to keep rising.

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