Top 20 prescription drug prices have skyrocketed, advocacy group says Report says pharmaceutical companies' profits soared

September 10, 1992|By Cox News Service

WASHINGTON -- Prescription drug makers made five times as much profit last year on their most popular drugs as the average profit from sales by the Fortune 500 corporations, according to a report released today.

The makers of the 20 most-purchased drugs averaged profits of 15 percent from sales in 1991, while Fortune 500 corporations averaged 3 percent, said the report by Families USA, a non-profit advocacy group for the low-income elderly.

The prices of the top 20 prescription drugs skyrocketed between 1985 and 1991. For example, the price of Premarin, an estrogen, increased 148 percent during the seven-year time period. Lopressor, a blood pressure pill, increased 118 percent, while Naprosyn, an arthritis medicine, increased 45 percent.

"The success of these greed-based pricing policies is reflected in the as tronomical excess profits of the makers of the top 20 drugs. They use the top 20 prescription drugs to squeeze consumers dry," said Ron Pollack, executive director of Families USA.

The report charges that manufacturers filter more money into advertising, promotion and lobbying than research and that the rate of increase of prescription drug prices was about four times that of the consumer price index during the seven-year period.

"Drug company lobbyists say skyrocketing drug prices reflect research needs, but the truth is that their pricing policies reflect nothing but greed," Pollack said.

A spokesman for the Pharmaceutical Manufacturers Association said their companies' research budgets increased from $9.6 billion in 1991 to $10.9 billion in 1992, an approximate increase of 13.5 percent.

The spokesman said price increases have slowed and that generic drugs have allowed customers to purchase lower-cost prescriptions. "We do understand that drug prices are out-of-pocket costs and they do hit older people harder," he said.

The PMA has endorsed the National Association of Insurance Commissioners' efforts to include prescription drugs in optional insurance plans and insurance reforms for small businesses that will help employers cover the cost of their employees' prescription drugs.

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