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Holmer: New Study on Rising Drug Costs 'Politically Motivated'

Aired April 26, 2000 - 1:30 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LOU WATERS, CNN ANCHOR: The Pharmaceutical Research and Manufacturers of America is a trade group that represents 150 companies. The group's president and chief executive officer Alan Holmer joins us from Washington.

Want to give you a chance, Mr. Holmer, to, first of all, respond to the numbers that we're citing from this study done by Families USA: 5.8 percent increase in all drugs in 99; 3.9 percent increase for older Americans. Do you agree with the numbers, first of all?

ALAN HOLMER, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA: Lou, the report, or this, quote, "study," was politically motivated. It is flawed. It doesn't even look at the prices that were actually charged. If you look at official government data from the Bureau of Labor Statistics, that data find -- shows that in 1999 prices went up 1.3 percent -- this is for pharmaceutical prices -- an increase of 1.3 percent, whereas the overall inflation rate for all products was a little over 3 percent. So, no, we don't buy into those numbers at all and we believe that they're flawed.

WATERS: So what's going on here? We know that the president is advocating a prescription plan in Medicare. Is there more to it than that?

HOLMER: Well, we think the president was right with respect to one thing, which is it is terribly important for our senior citizens that we be able to get them expanded drug coverage. The problems that the senior citizens have generally are because of a lack of insurance coverage.

And we in the pharmaceutical industry want to work with the president and with all member of Congress to try to achieve that expanded drug coverage for seniors, but it's very important that it be done through the private sector and not through a single one-size- fits-all government program that's going to straight-jacket our senior citizens. We think they need to have more choices available in the marketplace.

WATERS: Well, let's try and pin down this senior citizen drug cost. Is it true that while drug prices increase, that the prices for older Americans are increasing at a greater rate?

HOLMER: We have no data that would support that. And, again, the data that you have, it's a politically charged document. We went back and we looked at data from an independent data source, looking back over the course of the last six years. What we found was that, during that six-year time period, prices for all medicines went up 16 percent compared to an overall inflation rate for all products of 15 percent.

So, no, price increases have been relatively modest over recent years. Pharmaceutical expenditures have gone up a lot because of increases in volume of purchases of medicines, and also because there's been a shift from older, less expensive, less innovative medicines to the newer, more effective, more innovative, more expensive medicines. And, frankly...

WATERS: That...

HOLMER: Go ahead, Lou.

WATERS: That said, sir, you're at odds with the president and this advocacy group on that point. What will be your position in this debate on prescription drugs in Medicare?

HOLMER: Yes, our position is that we need to be able to get expanded drug coverage for seniors. But it's very important -- for example, I look at my parents, both of whom are in their 80s. I think it's important that they and all senior citizens to be able to have a broad array of choices in terms of the kinds of plans that they would be able to buy into, not unlike the kinds of choices that are available to members of Congress or all federal employees. It's the choices that we want to be able to provide to them and not say to them, there's only one government program and you're going to have to fit into that one program. We want to bring competition into the system and also to provide choices for those senior citizens.

WATERS: All right, sir. That's not the last we've heard of this during this presidential election year, I'm sure.

Alan Holmer from the Pharmaceutical Research and Manufacturers of America.

Thanks sir.

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