Study: Senior's Drug Costs Soar

W A S H I N G T O N, July 31, 2000 -- In the past eight years, Americans age 65 andolder have watched their prescription drug costs double, withprices expected to more than double again in the next 10 years, ahealth care advocacy group said.

Without prescription drug coverage by Medicare, fewer seniorswill be able to afford the dozens of prescriptions they must filleach year, said Families USA, which lobbies for universal healthcoverage.

A study commissioned by the group and released today saidAmericans 65 and older pay an average of $1,205 a year forprescriptions — up from $559 in 1992 — and will shell out $2,810apiece by 2010.

Prescription drugs now account for about 10 percent of seniors’health costs — and will likely rise to 13.3 percent in 2010, thereport said.

Older Americans account for only 13 percent of the nation’spopulation but pay 42 cents of every dollar spent on prescriptiondrugs, it said. They also pay more per pill because their purchasesaccount for only 34 percent of total prescriptions.

“When they go to the pharmacy, they pay higher prices for theirdrugs than anyone, because there’s no one bargaining on theirbehalf,” said Ron Pollack, Families USA executive director.

Almost 30 Prescriptions Annually

The study said the average senior’s cost per prescription hasrisen dramatically, from $28.50 in 1992 to $42.30 now, and isprojected to jump to $72.94 in 2010.

What’s worse, Pollack said, seniors also are buying moreprescriptions than ever.

He said the elderly got by on about 20 prescriptions per year in1992. Now they buy about 29 annually, and are expected to buy about39 by 2010.

The study was based on data gathered by Medicare, the federalhealth plan for the aged and disabled. Projections for future costswere developed by the PRIME Institute, a consulting group at theUniversity of Minnesota.

Families USA is urging lawmakers to expand Medicare to coverprescription drugs. It hopes the move will provide fuller drugcoverage for low-income Americans while giving the government morebargaining power to force drug manufacturers to lower their prices.

President Clinton has urged Congress to strengthen and modernizeMedicare with a voluntary prescription drug benefit to all 39million Medicare beneficiaries regardless of income.

Republican congressional leaders say the drug coverage should bereserved for the most financially needy. Their plan calls forprivate health plans to offer drug benefits and governmentsubsidies to pay drug costs for the neediest seniors.

The administration contends that would leave out 6 millionMedicare beneficiaries with incomes above the poverty line.

Increased Effectiveness

Alan F. Holmer, president of the Pharmaceutical Research andManufacturers of America, or PhRMA, said much of the increase inseniors’ drug spending is driven by advanced drugs that are moreeffective.

“That’s good news for patients, for whom medicines are the mostcost-effective form of health care,” he said. “They keep patientsout of the hospital, off the surgery table, on the job and in thehome.”

PhRMA spokesman Jeffrey L. Trewhitt said the report’s figuresbelie the hidden benefits of advanced drugs. New cardiacmedications, for instance, may cost an elderly patient $1,200annually, but far less than a $42,000 heart operation.

PhRMA supports expansion of drug coverage through private-sectorinsurance. Judith H. Bello, the group’s executive vice president,told Congress in June that lawmakers should allow free-marketcompetition and consumer choice to contain costs.