AFL-CIO-Sponsored Group Releases Study of ‘Outrageous’ Drug Prices
Kicking off its campaign to push for a Medicare prescription drug benefit, a newly formed AFL-CIO-backed group released a study on May 23 stating that pharmaceutical companies last year earned after-tax median profits of 18.6%, "compared to 4.9% for all other Fortune 500 companies," CongressDaily reports. Yesterday marked the launch of the Alliance for Retired Americans, which will lobby for lower prescription drug prices and a Medicare drug benefit. The group held a rally at the Capitol yesterday, where AFL-CIO President John Sweeney said that the size of the alliance -- 2.5 million retirees and family members -- and its "national" focus will "make it an instant force to be reckoned with." Alliance members also rallied in front of Pfizer headquarters in New York, a protest designed to draw attention to the "outrageous prices" of prescription drugs, according to Ed Coyle, the alliance's executive director (Rovner, CongressDaily, 5/23). According to the report, drug makers spend 30% of revenues on marketing and administration, compared to 12% on research and development. The report states, "Much of the companies' development of drugs actually is for derivatives of existing drugs rather than new drugs." To help seniors pay for prescription drugs, the alliance calls for a universal and voluntary Medicare drug benefit that has "affordable premiums and co-pays and ... protect[s] all beneficiaries from high out-of-pocket expenses." In addition, the federal government should enact "some system" of pharmaceutical price controls, without which "the costs of a Medicare benefit will not be affordable and millions of Americans of all ages will be denied their right to first-class health services" ("The Profit in Pills: A Primer on Prescription Drug Prices," 5/23). To view the full report, click here. Note: You will need Adobe Acrobat Reader to view the report.
PhRMA Protests
Drug companies "reacted immediately" to the report, with Pharmaceutical Research and Manufacturers of America President Alan Holmer saying, "This AFL-CIO-created organization [has] dredged up tired, old accusations left over from last year's election campaign, all of which have already been disproved. We know that members of the AFL-CIO and their families benefit from our breakthrough medicines" (CongressDaily, 5/23). He added that the industry's profit margin "enables [drug makers] to attract the investment needed to research and develop new medicines in a high-risk environment" (Bloomberg/Arizona Republic, 5/24).
New Hires
In other PhRMA news, the Washington Post reports that the association is "beefing up" its lobbying efforts, hiring three new lobbyists: Missy Jenkins, former head health lobbyist for the U.S. Chamber of Commerce and health policy adviser to former House Speaker Newt Gingrich (R-Ga.); Scott Olsen, former health aide to Sen. Max Baucus (D-Mont.); and Jacqueline Pomfret, director of legislative affairs for the American Association of Health Plans (Sarasohn, Washington Post, 5/24).
