New Panel Chief Promises Intensive Inquiry Into Prices : Sen. Pryor Attacks Drug Firms as Greedy

Sen. David Pryor (D-Ark.), the new chairman of the Senate Special Committee on Aging, Wednesday attacked the pharmaceutical industry for “greed” and “gouging,” and he promised intensive investigations of drug prices.

Pryor, making his comments to reporters as he outlined his top priorities as committee chairman, said that some elderly persons are so burdened by the high price of prescription drugs that they are hard pressed to pay for other essential costs, such as light and water bills.

“Frankly, there’s a lot of greed out there,” Pryor said. “All the medicines old people must have” often are excessively costly, he added.

As chairman of the Aging Committee, Pryor will have a platform to develop major national issues involving the elderly. The committee does not write legislation but offers the opportunity for extensive publicity and influence.

Wields Influence

Pryor himself is gaining wider recognition with his new position, though he already wields considerable influence as a member of the Finance Committee, which writes tax bills and regulates Medicare. In addition, he recently was elected secretary of the Senate Democratic Conference, the party’s third-ranking leadership post.

The senator is skeptical of drug manufacturers’ insistence that large revenues are needed to finance scientific development programs for new products. “They say they have to spend all this money on research; I don’t buy that,” Pryor said. “From the facts I have seen about the profits they’ve made, they will have a very hard selling job (to convince) me.”

The industry promised cooperation with any inquiry by Pryor. “If we are asked by Sen. Pryor to provide information about prescription drug prices, we will certainly do so,” Judee Shuler, spokesman for the Pharmaceutical Manufacturers Assn., said Wednesday.

Drug prices rose 8% during the 12 months ending in June, about double the general rate of inflation. Costs are driven up by the expenses of research and development, the lengthy approval process for new drugs and marketing costs, Shuler said.

The drug industry’s research and development expenditures have climbed 321% in the last 10 years, compared with a much more modest growth of 152% for all U.S. industry, Shuler said.

The industry is “gouging, taking advantages of government programs and of individuals,” said Pryor, who will replace Sen. John Melcher (D-Mont.) as Aging Committee chairman when the new Congress opens next year. Melcher was defeated in his campaign for reelection.

Pryor also accused the pharmaceutical companies of helping finance opposition to the new catastrophic health care legislation, which takes effect next year.

The legislation, an expansion of Medicare, would extend Medicare coverage to drugs for the first time, beginning in 1991, when the government would pay 50% of costs after a person had spent $600. The legislation encourages the use of generic drugs, rather than the more profitable name brands favored by the individual pharmaceutical companies.

The legislation is largely financed by a special premium paid by the 40% of those over 65 who have enough income to pay federal income tax. It has generated a protest movement among middle- and upper-income persons angry about the additional tax burden.

Pryor said that his office is getting a tremendous amount of mail on the issue and promised hearings to “clarify the issues.” He is convinced that the drug companies are helping spread misleading information on the issue and generating protests among senior citizens.