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University of Connecticut Poll Finds Public Unhappy About Drug Costs

Posted on: Saturday, 30 July 2005, 00:00 CDT

Jul. 29--Prescription drugs cost too much, and there's no justification for those high prices.

Most people would agree with that statement, according to a new national poll conducted by the University of Connecticut and funded by a Pfizer Inc. grant.

UConn finance professor John Vernon says the poll, released Wednesday, also shows that ignorance and misunderstandings about how medicines are developed and brought to market are at the root of those conclusions. Fifty-five percent of the 1,006 randomly selected people polled, for example, said government price controls on drugs would not cause pharmaceutical companies to invest less money into research and development, contrary to what Vernon and many industry experts believe.

"The failure of such a high proportion of Americans to understand the most basic economic principals relating to this industry is troubling, but not terribly surprising," said Vernon, one of the lead researchers in the study. "If public opinion based on economic ignorance leads to policy reforms, such as drug price controls, then public health in the U.S. could be significantly harmed in the long run. There is a good reason why some 99 percent of all economists denounce price controls."

Vernon, part of the Center for Healthcare and Insurance Studies at the UConn Finance Department, used a $25,000 grant from Pfizer Inc. to fund the research. The world's largest pharmaceutical company, with its global research headquarters in Groton and New London, provided the grant for research on any healthcare topic, Vernon said.

"They had absolutely no say in what the funds might be used for," he said.

He chose the topic last year, he said, after a spate of national publicity about drug prices, some of it casting the pharmaceutical industry in an unfavorable light.

The poll found that many people also misunderstand the role of patents on new drugs in ensuring that companies will be able to recoup their investment in developing a new drug, by not allowing generic copies of the new drug to be sold until the patent expires. Research and development costs per drug are now estimated at $1 million, and new drugs take an average of 15 years to go from discovery to testing to manufacture, according to Pfizer Inc. spokesman Stephen Lederer.

Lederer said the poll results demonstrate that the pharmaceutical industry needs to do a better job helping the public understand the complex mix of factors that determine the price of pills, and to combat the simplistic arguments being put forth by industry critics.

"The price of a pill is really the price of ensuring that there is a pharmaceutical industry," he said. "Price controls would be the end of this industry."

The UConn poll basically reinforces what Pfizer knew about how much of the public perceives the industry, Lederer said, and as such confirms the need to get its side of the story out to the general public as well as policymakers.

"We're not as good as we should be at explaining an extremely complex business," he said.

Two months ago, Pfizer chairman and chief executive officer Hank McKinnell released, "A Call To Action: Taking Back Healthcare for Future Generations," which includes a discussion about drug costs.

Lederer noted that many medicines are available today that are keeping people alive that did not exist just 10 or 15 years ago, and that is why continued investments into new drugs is so important. Part of the public's perception about high drug costs may also be more of a reflection of lower insurance reimbursements for medications than it is of higher prices.

Sophie Kashanski, 81, of New London, though, isn't concerned as much with the industry's well-being, financial and otherwise, as she is with her own and that of her friends.

"They overdo it on the pricing," said Kashanski, who takes four different medications. "There should be price controls. One of the medicines I take is very expensive."

Another New London resident in her 80s, Rose Sabilia, estimates that she pays at least $200 per month for the five medications she takes daily. Sabilia said she has to pay the entire cost herself, because she doesn't have a prescription drug coverage with her health insurance. When her husband was alive, she added, their combined monthly prescription costs were about $800.

"It seems like every time I go for refills, the prices go up," she said. "Maybe we should do like the other countries and have socialized medicine, instead of spending all that money on the war in Iraq."

But Pfizer retirees William Auwood of Quaker Hill and George Edwards Jr. of Groton disagree. Edwards said medications helped save his life through two bouts of bladder cancer and one of kidney cancer. Insurance covered most of the costs of the drugs, he said, but he would have paid almost any price if necessary.

"The company has spent millions to get this out," said Edwards, 74. "I would pay it to stay alive."

Christopher Barnes, the UConn pollster, said this survey is the first to measure the public's understanding of the drug industry and how it governs drug prices.

Results of the poll also show: -- 54 percent of respondents believe drug companies make too much money, even though the question pointed out that their average profits are about the same as those of comparably sized companies in other industries.

--About 50 percent believe drug profits are too high, even when they eliminate the need for surgery or reduce hospital stays.

--Fifty-two percent said current drug prices are still too high even if lowering costs would mean fewer new drugs are available in the future.

--Sixty percent favored government price controls on drugs.

--Forty percent believed that price controls would not affect research investments.

--About 50 percent of respondents take prescription drugs regularly. About 90 percent have at least some insurance coverage for costs of medication, and 73 percent have a co-pay.

--Nearly one-quarter of respondents said they had been unable to purchase a drug in the last year because of its high price.

--About 15 percent of respondents pay $10 or less in drug co-payments, and 17 percent pay $10 to $20. Co-payments vary depending on the drug for about 13 percent. About three percent pay a $30 co-payment, and four percent pay more than half the cost of the drug. Co-payments have increased in the last year for 47 percent of respondents.

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PFE,

Source: The Day

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