Health Access - OuRx BILL OF RIGHTS: Prescription Drug Reform in California

Home Providing Consumer Protection Addressing the Rising Costs of Prescription Drugs OuRx BILL OF RIGHTS: Prescription Drug Reform in California

OuRx - Prescription Drug Reform in California

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The OuRx Bill of Rights
OuRx Fast Facts
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OuRx Bill of Rights
2006

Updated 7/6/06

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Prescription drug costs have increased an average of 8.3 percent a year for the past decade – nearly triple the rate of inflation. Californians are paying the price. The rapid escalation has made it more difficult for consumers to obtain safe, affordable prescription drugs.

Headlines point to problems with the safety of drugs. The Medicare prescription drug benefit has gaps in coverage and oversight. Prescription drug coverage is shrinking, co-pays are rising, and consumers face more difficulty paying for the medications that they need. Deceptive and unfair marketing and pricing practices stand in the way of reliable, informed consumer choices. Meanwhile, pharmaceutical companies continue to scale the Fortune 500 list with profits that far exceed other industries.

The OuRx Coalition—representing seniors, working people, consumers, communities of color, and California families—believes that consumer needs should come first, before drug companies, insurers and others in the health industry.

We believe that all Californians deserve access to safe, effective, and affordable prescription drugs that are purchased in a fair and transparent marketplace.

Members of the OuRx Coalition Steering Committee include:
AIDS Healthcare Foundation
California Alliance for Retired Americans
California Labor Federation
CALPIRG
Congress of California Seniors
Consumers Union
Gray Panthers California
Greenlining Institute
Health Access California
Latino Coalition for a Healthy California
Older Women’s League
Senior Action Network

While many of these issues require federal action as well, we call on California leaders to stand with us, and use the tools and authority we have as a state.

2006 Legislation Supported by the OuRx Coalition

Consumer, senior, and health groups support reforms to address the cost, quality and access of prescription drugs, including the following bills:

Cost

California should explore all possible avenues to make prescription drugs more affordable for California consumers and taxpayers.

AB2911 (Nunez/Perata) and SB1702 (Perata/Nunez) would establish a prescription drug discount program to use the purchasing power of the state of California (through its Medi-Cal program) to negotiate for the best possible drug prices for the 8-10 million uninsured and underinsured Californians
AB2877 (Frommer) would establish a website to facilitate Californians purchasing safe and affordable prescription drugs from other countries
SB452 (Alarcon) requires Medi-Cal contracts with drug manufacturers to be disclosed to the Governor.

Quality

California has the opportunity to advance the cause of prescription drug safety, to make sure that consumer get the most appropriate, safest, and most effective medicines they need.

AB71 (Chan/Frommer) would establish an online clearinghouse at the University of California for information about the safety and effectiveness of prescription drugs.

Access

California needs to fill gaps in both coverage and oversight left by the Medicare Part D program, so seniors and people with disabilities have access to needed medications.

SB503(Figueroa) to authorize Medi-Cal to cover the newly-imposed drug co-payments for those vulnerable 1.1 million seniors and people with disabilities who are eligible for both Medicare and Medi-Cal
AB2170 (Chan) would create a consumer report card on Medicare Part D prescription drug plans
AB2667 (Baca) would allow the state to monitor and regulate prescription drug coverage plans in the same way it regulates health plans.

OuRx Fast Facts
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Prescription drugs are more expensive than ever before.
Consumers, workers and seniors are paying the price. Now is the time to act!

Prescription drug costs are skyrocketing

Between 1980 and 2002, US prescription drug purchases increased from $12 billion to $162.4 billion.
American consumers paid $48.6 billion in out-of-pocket prescription drug costs in 2002.
Manufacturer price increases for existing drugs accounted for 26% of the increase in prescription drug spending between 1997 and 2001.
Retail prescription prices increased an average of 7.3% a year from 1992-2002 – more than double the average inflation rate of 2.5%.
29% of Americans failed to fill a prescription in 2000 because they could not afford to do so.
Prescription drug costs currently account for 10% of health care costs. They are estimated to reach a 15% share by 2010.
47% of large California employers that provide prescription drug coverage increased employee co-payments in 2002. 57% said they were somewhat or very likely to do so again in 2003.

Drug marketing and advertising are out of control

The pharmaceutical industry employs 83,000 sales representatives and spends upwards of $4.8 billion a year on one-on-one promotion to doctors. 20,000 of these representatives are in California.
61% of surveyed doctors reported receiving free meals, tickets to entertainment events or free travel from pharmaceutical representatives. Thirteen percent reported receiving money or in-kind benefits.
Between 1994 and 2000, money spent on direct-to-consumer advertising of prescription drugs increased from $266 million to $2.5 billion.
In 2000, 8 of 9 surveyed pharmaceutical companies spent twice as much on marketing, advertising and administration as on research and development.

Pharmaceutical companies are making record profits

The top 25 pharmaceutical executives averaged nearly $6 million in annual compensation in 2000.
The Fortune 500 pharmaceutical companies’ profits rose 33% in 2001, making it the most profitable industry in the world.
For July 2003-June 2004, PhRMA has budgeted $150 million nationwide in its various lobbying activities. This includes $45 million to fight state efforts to lower drug prices.

Over the past decade, drug companies have had median returns on investment of 18.5% - 5.6 times the median Fortune 500 rate.