A statewide survey shows that Providence consumers are charged an average of 79 percent more than the federal government pays when it buys for its own programs.

01:00 AM EST on Thursday, December 30, 2004

BY FELICE J. FREYER
Journal Medical Writer

Uninsured people pay much more for common prescription drugs than the federal government, a new study shows.

The study, by the Rhode Island Public Interest Research Group, was released yesterday at the State House by proponents of importing lower-cost drugs from Canada, just as Rhode Island readies to become the first state to license Canadian pharmacies to sell drugs through the mail.

The study looked at retail prices in 20 metropolitan areas, including Providence, where 23 stores were contacted by phone. The Providence researcher, RIPIRG advocate Matt Auten, posed as an uninsured consumer and asked the prices of common drugs. Similar surveys were conducted in the other 19 areas.

For 12 common prescription medications, RIPIRG's data show, Providence consumers are charged an average of 79 percent more than the federal government pays when it buys for its own programs, such as the Department of Veterans Affairs. The discrepancy was similar in the other cities surveyed: a 78-percent markup for the uninsured. Nationwide, the price differences ranged from 41 percent more for Ambien to 162 percent more for Synthroid.

Throughout the health-care system, those without insurance often pay the "sticker price" for care because they don't get the benefit of the discounts that large groups, such as insurance companies or the federal government, can negotiate. People with low incomes, however, can sometimes get breaks from sliding-scale fees at health clinics, or free or discounted drugs from manufacturers.

When uninsured people buy medication at the drugstore, "they get gouged," said RIPIRG's Auten, "often paying more than twice as much as the federal government pays when it buys the exact same drugs for federal agencies and programs."

Auten noted that many of the drugs treat chronic conditions, so that "even small savings each month add up quickly."

The study also compared prices with drugs bought from Canada. For nine drugs, it found, people in Providence pay twice as much as they would if they had bought them from a Canadian pharmacy. RIPIRG's report can be read at www.ripirg.org

RIPIRG had several recommendations for dealing with the problem, including state-run drug-buying pools that would negotiate better prices, expanding the use of lists that provide information about the most cost-effective treatments, increased scrutiny of pharmacy-benefit managers, and regulating the marketing practices of pharmaceutical companies.

The report also calls for legalizing the importation of drugs from Canada "as a stopgap measure until comprehensive reform passes."

But at yesterday's news conference, Canadian drugs were the main focus. The state Health Department is finalizing regulations that will put into effect a law empowering the Board of Pharmacy to award licenses to Canadian pharmacies under the same terms as out-of-state mail-order pharmacies in the United States receive. The final hearing on those regulations is scheduled for 10 a.m. today.

The law has led to dueling news conferences and news releases by pro-importation forces -- the Gray Panthers, the Senior Agenda Coalition, RIPIRG, the Rhode Island Medical Society, Ocean State Action and Rhode Island for Health Care -- and anti-importation groups -- the Rhode Island Pharmacists Association, the pharmaceutical industry, the Arthritis Foundation, and businesses.

On Monday, the Rhode Island Retail Foundation urged Governor Carcieri to halt implementation of the law until safety concerns can be addressed and the Rhode Island Economic Development Corporation can conduct an economic impact analysis of how the law will affect the state's 28 independent pharmacies. On Tuesday, the anti-importation coalition unveiled a Web site on the potential risks of drugs from other countries (www.RISafeMeds.org).

Yesterday, pro-importation advocates came out to promote the RIPIRG report. Marti Rosenberg, executive director of Ocean State Action, said the push for importing Canadian drugs was part of a "grass-roots" effort to break "the financial, corporate lock that the pharmaceutical industry has on our national government."

Citing information from the consumer advocacy group Public Citizen, Rosenberg said that 14 former senior Bush administration officials are now lobbying for the pharmaceutical industry, and that 13 pharmaceutical executives and lobbyists raised $2.2 million for Mr. Bush's presidential campaigns.

The new Medicare law prohibits the federal government from negotiating price controls on pharmaceuticals, as the Canadian government has done. Rosenberg said advocates know that federal price controls aren't on the horizon. But, she said, efforts at the state level -- such as legalizing or facilitating drug importation -- will eventually put pressure on the federal government to change its drug policies.