Posts Tagged ‘prescription drugs’

More on the prescription drug saga

Tuesday, January 6th, 2004

The story continues to unfold as the FDA says “nix” to states and cities seeking to import prescription drugs from Canada to get relief from onerous pricing here in the U.S. No states are actually importing drugs yet, but many say they will fight the FDA ruling. The cities of Springfield, MA and Montgomery, AL are both currently running programs to purchase drugs, and saving quite a bit of money by doing so.
The ruling was a response to Illinois Gov. Rod Blagojevich’s request for a waiver to allow the state to purchase drugs from Canada for state workers and retirees. He estimates that the state could realize a savings on the order of $91 million a year.

The FDA frames this as a consumer safety issue saying that “imported drugs could be tainted, old or fake,” but to many these protestations seem disingenuous. The pharmaceutical industry no doubt fears that this could open the door to drug pricing controls here in the U.S., and it would seem likely that the administration is going to want to keep the deep pockets in this industry happy pre-election.

See our prior discussion of this issue and a study pointing to the alarmingly high prescription drug costs in workers’ comp.

Ouch! Pain drugs or drug pains?

Thursday, October 23rd, 2003

The Bloviator points us to the fifth article in an excellent series on prescription drugs that ran in the Washington Post. This article deals with the millions of Americans who are turning to Mexico to curb rising drug costs – a practice not limited to consumers. In their quest to secure prices that are 20 to 70% cheaper, some municipalities are virtually turning into international drug cartels. Today, Boston announced its intent to buy its drugs in Canada.

The prescription drug headaches are even more severe in the workers comp sector than the group health side. NCCI recently compared WC to group health and found that under WC, buyers pay 74% more…some of the report’s key findings:

*Prescription drug share of medical costs by accident year in Workers Compensation (WC) grew from 6.5% in 1997 to 9.6% in 2001.

*Utilization has a greater impact on WC drug costs than price.

*WC pays roughly 125% of the Average Wholesale Price (AWP) of prescription drugs; Group Health (GH) pays only 72%. Therefore, WC paid 74% more than GH for the same drugs.

*Generic equivalents are prescribed when available 79% of the time for WC claims. A total of 56% of WC costs are associated with drugs that have no generic equivalent. Therefore, savings opportunities from using generic equivalents are only available for approximately 8% of total WC drug costs.

*Painkillers represent 55% of the cost of prescriptions in WC.