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Pharma's reputation continues to slide

Published on 01/07/04 at 05:45pm

The reputation of the pharmaceutical industry in the US continues to decline as the public grows increasingly concerned about the price of medicines.

A recent Harris poll of 979 Americans found only 44% thought the industry was serving its customers well, a 5% decline since last year and a 35% fall since 1997.The rapid decline is closely linked to public concerns about prescription costs.  

A recent study by lobby group AARP confirmed fears, finding manufacturers' prices on branded medicines had increased at three times the rate of inflation in 2003.

The group found the average annual increase in manufacturers' prices rose from 4.1% in 2000 to 6.9% in 2003, while the annual rate of inflation fell from 3.3% to 2.2% over the same period.

The study noted that price increases were invariably passed on to consumers.

John Rother, director of the AARP's office of policy and strategy said: "If the price of drugs keeps going up faster than inflation it will become more and more difficult for consumers, especially older consumers, to be able to afford them."

The report's authors also said that whenever Congress has passed legislation affecting prescription drug payments, the pharma industry has reacted by hiking up prices.

"The companies see the government playing a larger role in the payment of drugs so they raise their prices," said Stephen Schondelmeyer, professor at the University of Minnesota and the report's co-author. "Part of it is defensive positioning to raise the bar so that if pressure comes to squeeze prices are already higher."

Healthcare issues look set to play a crucial role in deciding the outcome of November's presidential election with another Harris poll of 2,016 adults finding 84% favoured "allowing people to import prescription drugs from Canada and other countries if they are much less expensive there," and that "reducing the cost of prescription drugs has become a big issue".

Democrat candidate John Kerry's support for legalising re-imports had counted in his favour compared to President Bush's opposition to it, but the Whitehouse has now indicated it will not block any new legislation.

Before this change of direction, 61% of people polled believed the main reason for Bush's opposition to drug importation was not the reason given - concern for the safety of imported drugs - but that he was protecting the profits of the drug companies who have supported him strongly.

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