Consumer Group Accuses Drug Makers Of Price Gouging In U.S.
July 15, 1998 2:18 PM
By Otesa Middleton
WASHINGTON (Dow Jones)--Prescription drugs for
mental disorders cost too much in the U.S., according to
a consumer group.
Public Citizen, founded by Ralph Nader, held a press
conference Wednesday accusing drug companies of
"price discrimination."
Dr. Sidney Wolfe, director of the organization's health
research group, said on average, drugs cost twice as
much in the U.S. as they do in other countries the group
surveyed.
Public Citizen studied the prices of eight prescription
antidepressants and antipsychotic drugs in 17 countries
in North America and Europe. Each drug, including Eli
Lilly & Co.'s (LLY) Prozac and Pfizer Inc.'s (PFE)
Zoloft, cost the most in the U.S.
Wolfe called for price controls similar to those in
Europe, which would limit a company's profits on
prescription drugs.
"The Consumer Price Index is going up because
pharmaceutical prices are going up," Wolfe said.
According to Public Citizen's study, Novartis AG's
Clozaril costs $317.03 for a 30-day supply in the U.S.
The price in Spain is the lowest of the countries
surveyed at $51.94. The average price in the surveyed
countries, excluding the U.S., is $111.20.
The pharmaceuticals makers defended themselves
against similar charges Tuesday when the huge generic
drug maker Mylan Laboratories Inc. (MYL) launched
its "Campaign for Fair Pharmaceutical Competition."
Mylan accused the makers of brand-name drugs of
exploiting loopholes in the law to win patent extensions
that delay generic versions.
The campaign aims to get consumers to ask Congress to
modify the Hatch-Waxman Act so brand-name drug
makers can't get automatic patent extentions when they
contest a generic.
The Pharmaceutical Research and Manufacturers of
America said Public Citizen and Mylan didn't take into
account the rising cost of bringing a new drug to market.
"The cost of research and development has more than
doubled since 1976," said Jeff Trewhitt, spokesman for
the association. In 1976, adjusted for inflation,
companies spent an average of $125 million on a new
drug.
"Today the comparable cost is $300 million to $600
million," Trewhitt said.
Public Citizen's study didn't take into account currency
fluctuations, price controls, patent piracy, different
standards of living and different medical practices in the
countries, Trewhitt said.
"The study also only looks at sticker prices. There are
deep rebates to government programs and managed
care. The study is simplistic and full of errors.
"The U.S. accounts for half of all new medicines
produced globally, partly because in other countries
companies don't have the money for research and
development," he said.
In response to Mylan's accusations, Trewhitt said the
generic company doesn't have these expenses.
"It costs an average of $1 million to get a generic drug to
market," Trewhitt said.
-Otesa Middleton; 202-862-6654
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