January 16, 2002
Drug prices reflect cost of advertising
See also: NYSUT Health and Safety Resource Center
Retail spending on prescription drugs increased 18.8 percent from 1999 to 2000. People aren't sicker, but the drug companies are slicker.
The 50 prescription drugs that were most heavily advertised to consumers accounted for nearly half of the increase, according to the National Institute for Health Care Management Research and Educational Foundation. The federal agency reported that more prescriptions - boosted by direct-to-consumer advertising - were a major cause of the overall spending increase.
Rising drug costs "threaten the lives and well-being of thousands of New York labor members" and are a factor driving the crisis in health care finance, said Alan Lubin, executive vice president of New York State United Teachers and chairman of a state AFL-CIO task force on prescription drugs.
The profit motive is supreme, Lubin said, noting that the drug companies spend more than three times on marketing than they do on research and development. "Meanwhile, they are reaping record profits in an industry with the highest profit ratios of any major corporate sector in the world," Lubin said.
Under Lubin's leadership, the task force developed a resolution on the subject that was adopted recently by the AFL-CIO. Among its provisions, it calls for a ban on direct-to-consumer promotional marketing and for government regulation of drug costs.
It also charged the statewide labor federation to:
- use its membership numbers to negotiate better drug prices for members and retirees;
- push legislation to get New York state to form an interstate compact on equitable pricing, and to use its bulk purchasing power to negotiate discounts and pass on the savings to those most vulnerable;
- join legal actions against drug companies involved in price-fixing; and
- encourage the state Attorney General's office to pursue lawsuits against drug companies involved in fraudulent practices.
"New York labor members and benefit plans are burdened with paying higher prices for their prescription drugs than citizens from other countries for the same drugs," said Lubin. "The problem of high prescription drug prices for us all will worsen as time goes on if the issue is not effectively addressed."
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