Drug Companies are taking advantage of older Americans and the poor through prescription price descrimination.
A recent study by the US Government Reform and Oversight Committee showed that older Americans and others who pay for their own drugs are charged far more for their prescription drugs than are the drug companies' most favorite customers, such as large insurance companies and health maintenance organizations (HMO's).
This study, requested by US Representative Tom Allen (1st district of Maine), compared the prices paid by pharmaceutical companies' most favored customers to prices paid by seniors for the 10 brand name drugs most commonly used by seniors.
The results of the study showed that a senior citizen (in 1st district of Maine - where study was conducted) pay, on average, over twice as much as the drug companies' favored customers. The price differential is approximately five times greater than the average price diiferential of other consumer goods.Click here to see Table..
Other drugs commonly used by seniors that are not among the top ten have even higher price differentials. For example, an equivalent dose of synthroid, a commonly used hormone treatment, would cost the favored customers only $1.78 but would cost the average senior (in Maine) almost $30.00. This is a price differential of over 1,500%.
It appears that drug companies are engaged in a form of "discriminatory" pricing that victimizes those who are least able to afford it. Large corporate and institutional customers with market power are able to buy their drugs at discounted prices. Drug companies then raise prices for sales to seniors and others (e.g., the poor) who pay for drugs themselves to compensate for these discounts to their favored customers.
Congressman Tom Allen will be introducing legislation soon entitled "Prescription Drug Fairness Act" to try and stop this practice from continuing. With the drug companies strong influence over the congress it will be difficult to get this bill passed. It is hoped the new senator-elect from North Carolina, John Edwards - the People's Senator, will work closely with Congressman Allen to help battle the pharmaceutical companies influence.