Getting Out Of Reach

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Getting Out of Reach Prescription drug prices are rising much faster than the rate of general consumer inflation. The most heavily affected are those who can least afford it, like older Americans living on fixed incomes, and the working poor with inadequate or no health insurance. The rise in drug prices is causing the public to ask why. The reasons include the immense research costs, consumer advertising and the growth of managed care. The continue rise in prescription drugs costs has touched off intense public debate on how best people can get some relief. Some politicians and consumer groups have pushed for some form of price controls. Drug companies oppose price regulations. They contend it would restrain innovation in an industry that invests billions of dollars annually on research. Joe Madera, a retired man in his late 60s living in Pomona, CA, pays more than $250 a month out of pocket for prescription drugs to maintain his diabetes under control. Medicare covers his doctor bills and any hospital visits, but the federal health program does not cover prescription. While this man’s household income is fixed, the cost of his medication just keeps going up. Most Americans do not feel the increase in drug prices directly because they purchase prescription medicines through their employee health plans or their HMOs, where they do not pay the full price, often making only a $10 or $20 co-payments. The rise in drug prices does hit this group indirectly. Many health insures have blamed higher drug cost as the reason behind hikes in medical premiums or restriction of benefits. One reason why retail prices are going up is hat the new generation of drugs is expensive to produce. The cost of research and developments are high. Creating a complex, genetically engineered drug versus producing a conventional drug is like the difference between manufacturing a Ford Escort car and designing a fine German Mercedes-Benz. Indeed, the process of taking a drug from the laboratory to the patient is a lengthy one, requiring years and costing millions of dollars. And success is not guaranteed. Often there is a huge difference between how a drug behaves in the test tube and how it acts on humans. New drugs typically require several phases of tests on humans to demonstrate that they work and do not produce serious side effects. Only one medicine out of five makes it through human clinical tests, a representative for the Pharmaceutical Research and Manufacturers of America argue.

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