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PhRMA Statement on Families USA Reports

WASHINGTON, April 18, 2007 — Pharmaceutical Research and Manufacturers of America (PhRMA) Senior Vice President Ken Johnson issued the following statement on today’s Families USA reports:

"Unfortunately, Families USA seems to be more interested in sound bites than sound policy. The group’s continued attacks on the Medicare prescription drug program clearly are not in the best interests of seniors and disabled Americans.

"Here are the facts about drug costs which Families USA ignores:

• Average premiums for Medicare Part D plans dropped between 2006 and 2007, according to the Centers for Medicare and Medicare Services;

• According to the nonpartisan Congressional Budget Office (CBO), Part D plan bids dropped by 15% between 2006 and 2007;

• According to CBO, the projected cost of the Medicare prescription drug program over the next decade dropped by over $260 billion between this year and last year;

• According to the Medicare Office of the Actuary’s national health care estimates, 2005 was the sixth consecutive year that increases in prescription drug spending have slowed;

• According to the Medicare Office of the Actuary, the Part D program led to a slowing of drug price growth in 2006. The actuaries attribute this deceleration to the discounts and rebates negotiated by Part D plans;

• According to the federal government’s Consumer Price Index, prescription drug prices rose by 1.0% over the 12 months ended March 2007, compared to 4.0% for all health care services.

"These are not studies conducted by an organization with a particular advocacy agenda. This is information generated by the U.S. government.

"Yet, Families USA continues to advocate policy changes that would likely reduce seniors’ access to life-saving medicines. Families USA holds the Veterans Administration’s health system as a model for Medicare, but VA does not provide the same broad access to medicines or to pharmacies offered through Part D plans.

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"In fact, only 42 percent of the top brand drugs most used by seniors are included in the VA formulary, according to research by The Lewin Group. By comparison, 97 percent are covered by the two Medicare Part D plans with the highest enrollment."

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA companies are leading the way in the search for new cures. PhRMA members alone invested an estimated $43 billion in 2006 in discovering and developing new medicines. Industry-wide research and investment reached a record $55.2 billion in 2006.


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Contact: Karl Uhlendorf Senior Vice President (202) 835-3460

Posted: April 2007