Drug Price Rise May Add Pressure for Controls : Health: Costs soar faster than general inflation rate. President indicates he may compromise on regional alliances, spending caps.
Despite efforts by many leading pharmaceutical companies to moderate their price increases last year, wholesale drug prices rose 15.5 times faster than the general inflation rate at the manufacturing level in 1993, according to a Senate report released Monday.
The findings, which were disputed by the drug industry, are expected to increase pressure for government controls on drug prices. The development came as President Clinton reportedly signaled a willingness to compromise on two key elements of his health care reform plan: regional health alliances and overall spending caps.
In 1993, prices charged by drug manufacturers rose 3.1%--the lowest increase in nearly three decades. The moderation has been attributed to voluntary efforts by the pharmaceutical companies to keep increases within the general rate of inflation.
But the newly released analysis of drug pricing by the Senate Select Committee on Aging noted that, even though drug price inflation has cooled, the overall increase still was 15.5 times the inflation rate of 0.2% for all manufacturing prices in 1993.
The report cited a 21.3% price increase for Lozol, a diuretic manufactured by Rorer; 13.2% on Zovirax, a herpes drug by Burroughs; 12.4% on Lorcet Plus, a painkiller by UAD Labs; 12.4% on Thyrolar-1, a thyroid replacement by Forest, and 12% on Lortab, a painkiller by Whitby.
It identified UAD Labs, Rhone Poulenc, Alcon and Boots as the companies with the highest increases in the industry during 1993.
Sen. David Pryor (D-Ark.), chairman of the committee, said the report demonstrates a need for stricter government controls on the pharmaceutical industry under health care reform.
“The findings of this report call into question the ability of the marketplace to contain drug prices,” Pryor said. “It provides compelling evidence that Congress may need to consider more meaningful price restraints.”
While Clinton’s health care reform proposal would give the government more leverage to discourage large drug price increases, the bill would not impose strict price controls. Pryor, a leading critic of the pharmaceutical industry, did not say what kinds of controls he had in mind.
The Pharmaceutical Manufacturers Assn. accused Pryor of using the wrong benchmarks to measure drug price inflation. It noted that the increase in drug prices last year was the lowest since 1974, and compared favorably to a 5.4% increase in all health care costs.
Clinton, meantime, discussed his willingness to compromise on health care reform during a closed-door meeting with the nation’s governors at the White House. According to those who attended, he did not say what changes he would accept.
But the President’s flexibility on these items have become well known.
In his State of the Union address last week, the President indicated that the one principle on which he will refuse to compromise is that of universal coverage for all Americans. By offering to compromise on alliances and spending caps, he was responding to Republican criticism that alliances--regional insurance pools--would create an unwieldy, new bureaucracy and that prices cannot be controlled by imposing overall limits on spending.
Meanwhile, the leader of a faction of lawmakers who support a government-financed, “single-payer” health care plan similar to the Canadian system warned that the White House is making a “very, very dangerous and wrong assumption” that it can take those liberal votes for granted.
The single-payer plan--the most radical of the health care reform proposals--has 92 co-sponsors in the House. Although these 92 votes are considered crucial to passing the President’s health care plan, the White House is concentrating on winning over lawmakers who support more conservative alternatives.
“They (the President’s advisers) have simply stopped talking to us. . . . There’s a fundamental assumption being made up at the White House, which is a mistake, and that is that all the single-payer people are just waiting to jump on the President’s bandwagon,” Rep. Jim McDermott (D-Wash.) told a group of reporters.
Although 45 single-payer supporters have also co-sponsored Clinton’s plan, McDermott described it as nothing more than “political politeness.”
Also on Monday, the League of Women Voters and the California-based Kaiser Family Foundation announced a $4.1-million nationwide education drive to provide “Straight Facts on Health Reform.”
The campaign will consist of television, radio and print advertising and 60 town hall meetings throughout the country between now and the end of April. Four town hall meetings are planned in California.
Times staff writers Edwin Chen and Karen Tumulty contributed to this story.
