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Rising Rx Drug Cost: The Scope of the Problem (cont'd)
The rising cost of prescription drugs is the number one domestic political issue facing the United States government. President Bush and congress are currently negotiating a prescription drug bill for Medicare recipients projected to cost taxpayers over $400 billion during the next decade. Although a Medicare drug benefit plan would be the largest entitlement plan enacted in over thirty years, it would only pay for a fraction of seniors’ prescription drug cost. The proposed plan would not aid the 240 million Americans not covered by Medicare.

Paying for escalating prescription drug cost worsens existing state budget shortages. States purchase large quantities of prescription drugs via the Medicaid program, and subsequently states are highly motivated to reduce these costs. In 2000 Maine passed a state law, Maine Rx, lowering prescription drug cost. Maine Rx requires drug manufacturers wishing to sell medications to Maine’s Medicaid program recipients to discount the price of those medications to all Maine’s residents lacking prescription drug insurance. PhRMA, the pharmaceutical manufacturers’ trade group, sued Maine stating that Maine Rx would illegally interfere with interstate commerce. Ultimately, the Supreme Court ruled in favor of Maine overturning an injunction. Maine Rx is expected to go into effect by January 2004, and other states are expected to develop similar programs.

Individuals, particularly the elderly, suffer badly from rising prescription drug costs. Some are even forced to choose between paying for food or medication. To deal with this situation, senior citizens living in the northern United States frequently take bus trips to Canada to purchase their medications at a deep discount, even though purchasing their medications in Canada breaks existing US law. This tactic has gained such widespread support that Congress is considering changing the law.

Many working families struggle to afford prescription medications without the benefit of health insurance. Frequently care is not even sought due to the expense. Although it is not frequently noted, the soaring cost of prescription drugs affects those with excellent health insurance and prescription drug coverage.

Individuals with prescription drug plans are subjected to a tier system in which the lower tiered drugs are less expensive and have lower monthly prescription drug co-pays. The newer and more expensive medications belong to a higher tier with higher monthly prescription drug co-pay required to purchase the medication. The tier system of paying for medications transfers some of the pharmaceutical cost from the insurance company to individuals. A monthly co-pay of $30 or more is frequently required to purchase the higher tiered medications. This $360 annual cost for one medication quickly grows into an annual cost exceeding $1000 for patients requiring multiple medications. Those not purchasing medications still pay increasing insurance premiums partly due to the insurer’s rising pharmaceutical costs. In fact all Americans are directly or indirectly affected.

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