By Jane Birnbaum

When Norman Davis' mother, Florence, retired after a lifetime laboring as a beautician and domestic worker, her only income was $400 a month from Social Security. So Davis, a retired trainer for New York City's Parks Department and member of AFSCME Local 1508, didn't think twice about paying his mother's $200 monthly bill for eye medication and other prescriptions.

And Davis, 75, didn't hesitate to attack high drug prices at Capitol Hill hearings the Clinton administration convened six years ago. "I took one of my mother's eye-drop bottles with me and I held it up," Davis recalls. "I said, ‘You see this bottle? It costs $50, and the stopper alone fills half of it! If not for me, it would be a desperate situation. My mother would have two choices—pay rent and maybe eat, or pay this prescription and not pay the rent or eat.'"

	What price? AFSCME member Norman Davis holds a photo of his mother, Florence, who depended on his help to buy her medication.

Davis' mother died four years ago. Today, he carries on her legacy by editing a retiree newsletter for AFSCME District Council 37 and counseling other New York AFSCME retirees, primarily women, living on less than $1,200 a month.

Because they belong to a union, most of the retirees Davis assists have some prescription drug coverage through their former employers. Such coverage helps supplement Medicare, the federal health insurance program for seniors and people with disabilities, which does not cover the costs of prescription drugs except in health maintenance organizations. But with prescription drug prices increasing 306 percent between 1981 and 1999, and drug spending rising 18.4 percent in 1999, according to the House Democrats' Prescription Drug Task Force, the future for all seniors is grim unless prescription drug price trends turn around.

Already, those least able to purchase prescription drugs pay the highest retail prices: the roughly one-third of Medicare beneficiaries currently without prescription drug coverage—some 13 million and rising—and the nation's 45 million without health insurance.

In fact, all American consumers regularly pay up to twice as much as Europeans and Canadians for the same drugs. "Free market competition is supposed to bring prices down, but the only free market for drugs is in the United States, and we have the highest prices," says John Golenski, executive director of RxHealthValue, an alliance of unions, health plans and consumer groups. "Everywhere else, the ministers of health negotiate prices on behalf of the whole population and set price ceilings."

Even animals get better drug prices than U.S. residents. According to a spokesman for Rep. Tom Allen (D-Maine), a one-month supply of the SmithKline Beecham topical antibiotic bactroban costs $9.98 for dogs and $31.56 for humans—a price differential of 216 percent.

And all this is happening as drugs have never been more central to health care delivery. "We are making breathtaking advances in our ability to treat disease pharmacologically," says Golenski. "What we call medicine is increasingly pharmacological care."

	Top 10 Drugs for Seniors	Used to Treat	U.S. Retail Price	Canadian Retail Price	Mexican Retail Price
	Zocor (5 mg, 60)	cholesterol	$106.84	$ 43.97	$ 47.29
	Ticlid (250 mg, 60)	stroke	$112.92	$ 52.35	$ 39.61
	Prilosec (20 mg, 30)	ulcers	$105.50	$ 53.51	$ 29.46
	Relafen (500 mg, 100)	arthritis	$110.99	$ 59.55	$ 49.26
	Procardia (30 mg, 100)	heart	$110.90	$ 72.82	$ 87.78
	Zoloft (50 mg, 100)	depression	$195.07	$124.41	$155.52
	Vasotec (10 mg, 100)	heart	$ 94.31	$ 73.42	$ 57.03
	Norvasc (5 mg, 90)	blood pressure	$109.24	$ 87.71	$ 88.08
	Fosamax (10 mg, 100)	osteoporosis	$169.73	$ 45.01	$ 51.33
	Cardizem (240 mg, 90)	heart	$162.22	$142.70	$ 88.14
Source: National Council of Senior Citizens

	Leading the way: SEIU Local 1989 President Brenda Kaler attacks drug companies' newspaper ads the day Maine's price control bill became law.

The issue of U.S. prescription drug prices has come to the forefront this year through the current debate over how to modernize Medicare by adding a prescription drug benefit. The Democrats' plan, endorsed by presidential candidate Vice President Al Gore, would add a new drug benefit to Medicare's traditional coverage for medical services and hospitalization.

Pharmaceutical executives provided the well-paid lobbyists to work for passage of the Republicans' pro-drug-industry Medicare plan, H.R. 4680, which passed the House in late June on a 217–214 vote, largely along party lines. Its scheme depends upon the private insurance industry and HMOs, rather than Medicare, to provide drug coverage. Opponents say it would do little to contain drug costs and would leave millions without coverage—if it can work at all. Tellingly, the Health Insurance Association of America, the insurers' trade group, has taken no position on H.R. 4680. And its president, Charles Kahn III, a longtime GOP congressional staffer, told Congress in July that rapidly escalating drug prices would make private drug coverage difficult to price and that its costs would equal or surpass what most Medicare beneficiaries already pay for drugs.

"History tells us that when it comes to health care, for people who are old or sick, the private market doesn't work—that's why Medicare was started in the first place," says Diane Archer, president of the Medicare Rights Center. "Insurers can't make money providing affordable coverage to these populations," she says. "A private insurance mechanism defies logic."

"In the ‘Flo' ads [which feature a senior citizen actress annoucing she doesn't want government in her medicine cabinet], the pharmaceutical companies were in effect saying a Medicare drug benefit would mean price controls that would ensue," says George Kourpias, president of the National Council of Senior Citizens. "And they are quite right."

The drug industry is the most profitable in the world: In 1999, the top 12 companies netted $27.3 billion—the equivalent of $100 for every man, woman and child in the United States, according to Public Citizen. The drug industry has used its enormous financial clout to block a comprehensive Medicare drug benefit, according to Frank Clemente, director of Public Citizen's Congress Watch. In a report this summer, Public Citizen found that pharmaceutical companies and manufacturers spent $236 million between 1997 and 1999 to deploy an army of Washington lobbyists, many former Capitol Hill staffers. Since July 1999, drug companies have spent $65 million on television advertising—including the "Flo" campaign—and untold millions more on radio, phone banking and print communication. Between 1997 and the end of 2000, Public Citizen projects, drug companies will have given approximately $23 million to political campaigns and parties, 80 percent of it to Republicans.

		From America@work, October 2000.

While the campaign coffers of Republican lawmakers willing to do the bidding of drug companies grow fat, so do the wallets of chief executive officers in the pharmaceutical industry. In 1998, the highest-paid drug executive, Bristol-Myers Squibb's chairman and CEO, C.A. Heimbold Jr., drew $14 million in salary, according to Standard & Poor's Super 1,500 Index—not including the $38.3 million in stock options exercised and $160 million in unexercised stock options.

Volume drug buying by Medicare and large consortiums of unions and employers could put a big dent in costs, according to Golenski. "Volume buying is what the drug industry really fears," he says. But it would not aid the 45 million Americans with no health insurance and another 19 million with only partial or temporary health coverage, he adds. Many seniors still would be dependent upon family members like Norman Davis—if they were lucky enough to have such support.

Critics may brand price controls as "un-American," but at least one member of the medical establishment appears unafraid of that charge. In her departing editorial in the June issue of The New England Journal of Medicine, editor Marcia Angell, M.D., wrote that the pharmaceutical industry is important to public health and so heavily subsidized and protected by the government that "its social responsibilities should not be totally overshadowed by profits." She suggested that a panel of experts should consider whether some form of drug price controls is desirable, and if so, how it might be implemented.

"Just as public utilities are not permitted to charge whatever the traffic will bear, neither should drug companies," Angell wrote. "It is hard to take seriously the inevitable industry argument that price controls would stifle innovation and frighten investors when profit margins are so great and so much revenue is spent on marketing."