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Instead of leading the way
toward affordable prescription drug coverage for all Americans,
pharmaceutical executives seem determined to squander the
good will they inherited from their predecessors for immediate
corporate gain and greed. The public health, our nation's
economic health, and the long-term health of the very companies
they head are negatively impacted by these short sighted
and ill-advised corporate strategies.
The Medicare Prescription Drug Act recently
passed by Congress puts the interests of the pharmaceutical
industry, the insurance companies and the pharmaceutical
benefit managers ahead of our senior citizens. It is a morally
bankrupt piece of Legislation doomed to fail. The Bush administration
thinks it can trick seniors into believing the President
has done something meaningful to provide senior citizens
with the kind of prescription drug benefit they need by
delaying implementation until after November's election.
But Vermont seniors will not be fooled. Unfortunately drug
prices are continuing to rise as our Federal Government
stands idly by.
The Bush administration
is doing everything it can to protect the pharmaceutical
industry from efforts to secure fair prices. The FDA is
trying unsuccessfully to scare us into believing that it's
unsafe for us to purchase drugs from reputable Canadian
and European vendors.
Drug
companies' corporate strategies include Pfizer's latest
effort block reimportation of prescription drugs from Canada
to keep Americans from paying lower prices for drugs. The
executives of these companies ask us to believe their actions
are motivated by concern for our health and our welfare.
It is instead a rather desperate effort to stem the tidal
wave of public sentiment which increasingly demands fair
prices. If the industry is allowed to shut off this important
Canadian safety valve, many more individuals will suffer
adverse health and economic outcomes because they won't
be able to afford to buy the drugs they need.
The pharmaceutical industry
wants us to believe there are no alternatives to the current
discriminatory pricing scheme, which has Americans paying
the highest prices in the world for their prescription drugs,
and which too often requires many Americans with health
conditions, particularly senior citizens, to pay the very
highest prices paid in America . Sadly, not all receive
the medications they desperately need, and too often people
go without, or take reduced dosages in an attempt to get
by.
These pharmaceutical executives
are determined to preserve their advantage; if they have
their way taxpayers, businesses, and individuals will have
to ante up yet more money every year for prescription drugs.
They threaten dire consequences if governments have the
temerity to use their leverage as large purchasers to negotiate
for lower prices.
They shroud their prices
and marketing practices in secrecy in hopes that Americans
will forget that basic fairness demands that businesses,
states and individuals all get a better deal from the industry.
They suggest there's no room
for government to use market power to win a better deal
for federal and state programs and to use its bargaining
clout on behalf of folks who have inadequate or no prescription
drug coverage.
The facts suggest they are
asking Americans to buy into a myth they have created. Here
are some facts they don't want you to know:
•
In 2002 the pharmaceutical industry raked in profits five-and-a
half time greater than the median for Fortune 500 companies.
• In 2000, 2001, and
2002 the 10 drug companies in the Fortune 500 topped key
measures of profitability netting a profit of 17 cents
for every dollar of revenue and producing a return on
assets of 14.1 percent.
• The drug industry
ranked second among all businesses in return on shareholder
equity, more than two and one half times the median for
fortune 500 companies.
• Pfizer, with $9.1
billion in profits in 2002, was the most profitable of
the Fortune 500 drug companies producing 26 cents of profit
for every dollar of revenue. Early this year Pfizer acquired
Pharmacia, another Fortune 500 drug company with $597
million in profits in 2002.
In
spite of industry claims that fair prices would chill research
and development the facts suggest the industry has plenty
of alternatives to cutting back on worthwhile research and
development. Last year Fortune 500 drug companies took 17
percent of revenues in profit while spending just 14.1 percent
of revenues on R&D.
Seven out of the nine profitable
Fortune 500 drug companies devoted more of their revenues
to profit than R&D.
Pharmaceutical companies
generally lump marketing expenses in with administration
costs, consistent with an industry culture devoted to preventing
familiarity with their marketing and pricing practices.
Nonetheless we know that in 2002 Fortune 500 drug companies
devoted 30.8 percent of their revenue to marketing and administration,
and just 14.1 percent of the revenue they reported on research
and development.
In 2000 and 2001, eight of
the nine drug companies selling the most drugs to America
's seniors spent more than twice as much on marketing and
administration than on R&D, according to Families USA.
The CEOs of these companies reportedly earned an average
of almost $19 million. This figure does not include stock
options.
Figures documented in the
new Public Citizen report, “The Other Drug War, 2003,” reveal
that the industry spent a record of $ 91.4 million on lobbying
activities in 2002, an 11.6 percent increase from 2001.
Recently Pharmaceutical Researchers and Manufacturers of
America, the industry trade association, announced plans
to increase such efforts by 25 percent, and a virtual army
of lobbyists descended on our nation's Capitol to successfully
influence the Medicare prescription drug debate.
These figures do not include
spending on advertising and PR, direct mail, telemarketing,
or grants to advocacy groups and academics made to benefit
the industry's interests.
Finally, there are the campaign
contributions used to directly and indirectly buy influence
with our government. In the 2002 election cycle the industry
spent at least $17.6 million on various media to support
GOP prescription drug legislation they helped design. They
funded $8 million dollars of ads in key congressional races.
The pharmaceutical industry can be expected to give generously
to its friends in the upcoming election cycle.
There
is a strong need for elected officials to put the public
interest ahead of the corporate interests of the pharmaceutical
industry. I will continue to do all I can as Vermont 's
Lieutenant Governor to fight for fair pharmaceutical prices
in Vermont . I will support all efforts to secure fair prescription
drug prices for the state, businesses, and individuals.
I'll continue to speak
out, develop new ideas, and help win passage of Legislation.
I'm prepared to help Vermont lead the way on fair prescription
drug prices.
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Richard Davis Article on Cheryl's
work at NLAR |
