Drug companies

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Dec. 29, 2004, 8:26PM

What big drug companies don't want you to find out

Those least able pay the most for prescriptions

By PETER ROST

The U.S. health-care system is the best in the world. Or so we are often told.

But is it really true?

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It is certainly the best system for drug companies, which can charge the highest

prices in the world to some U.S. consumers. The Congressional Budget Office has

estimated that average prices for patented drugs in 25 other top industrialized

nations are 35 percent to 55 percent lower than in the United States.

And it is a pretty good system for hospitals, insurance companies and others

that deliver health-care services. Americans spend about twice as much per

person for health care as do Canadians, Japanese or Europeans, according to the

World Health Organization.

But it's not a good system for American citizens. The United States has shorter

life expectancies and higher infant and child mortality rates than Canada, Japan

and all of Western Europe except Portugal, according to the WHO.

I'm a drug-company executive who has spent 20 years marketing pharmaceuticals.

And I'm troubled. I'm most troubled by the fact that we stick it to the people

who can afford it the least.

For instance, elderly people who use a Medicare discount card and have to pay

$1,299 annually for a drug that the Department of Veterans Affairs purchases for

$322, according to a comparison by Families USA. Or middle-class families that

lose health insurance and have to pay $29,500 for an overnight hospital stay,

when Medicaid would have paid only $6,000, according to The Wall Street Journal.

It just doesn't make any sense. And, not surprisingly, the companies with the

biggest profits - those in the drug industry - have been fighting hardest to

maintain the status quo.

Our dirty little secret is that the drug industry already sells its products,

right here in the United States, at the same low prices charged in Canada and

Europe. It's done through rebates. These are given to those with enough power to

negotiate drug prices, such as the VA.

A 2001 study by the consumer advocacy group Public Citizen found that drug

companies' favorite customers paid just a little over half the retail price.

This leaves the 67 million Americans without insurance to pay cash, with no

rebates, at double the prices paid by the most-favored customers.

The fight against reimportation of drugs is a fight to continue to charge our

uninsureds full price while giving everyone else a rebate.

But what about all those programs drug companies provide to help the indigent

pay for drugs? If they really worked, the Kaiser Family Foundation wouldn't have

reported that 15 percent of uninsured children and 28 percent of uninsured

adults had gone without prescription medication in 2000 because of cost, and 87

percent of uninsured individuals with serious health problems reported trouble

obtaining medication.

People today have to choose between drugs and food. The journal Diabetes Care

recently reported on a study of older adults with diabetes. One in three said

they went without food to pay for drugs.

As a drug-company executive, I care about profits. When I was responsible for a

region in Northern Europe, I doubled sales in two years by lowering drug prices,

and in the process increased my company's sales ranking in Sweden from No. 19 to

No. 7 in less than two years. I proved that it is possible to do good business

with lower prices.

It's encouraging to see that the American Medical Association recently came out

in favor of a system that would allow U.S. pharmacies and wholesalers to

reimport drugs safely from other countries. This is exactly what Europe has had

for more than 20 years.

It is outrageous to claim, as politicians and drug companies have done, that the

United States wouldn't be able to safely and cost-effectively handle

reimportation. A key trade association for European pharmaceutical companies

claims there has never been a confirmed case in Europe of a counterfeit

medication reaching a patient as a result of reimportation. In Germany, this was

verified last year by the Federal Ministry of Health.

In the next five years, branded drugs with annual sales of $72.9 billion are

expected to lose patent protection. So we in the drug industry are fighting

reimportation because we're worried about the bottom line. But when we have to

choose between that and the lives of those who can't afford drugs, we have to

choose life.

I joined this industry to save lives, not to take them. And that's the reason

I've chosen to speak out.

Rost is a vice president of marketing at Pfizer; the views expressed here are

his own, not those of his employer.

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