[Congressional Record Volume 147, Number 12 (Tuesday, January 30, 2001)]
[Extensions of Remarks]
[Page E44]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  AS PROFITS ON A DRUG GO UP, SO DOES UTILIZATION. IS THIS A FORM OF 
                             PATIENT ABUSE?

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, January 30, 2001

  Mr. STARK. Mr. Speaker, Medicare and many others pay for prescription 
drugs on the basis of the average wholesale price (AWP). Unfortunately, 
the AWP is a completely fictitious price which has been manipulated by 
a number of drug companies in ways the companies believe will influence 
physician prescribing practices. Have they succeeded?
  While the AWP payment loophole is an abuse of taxpayers, I am 
concerned that it may be causing unnecessary utilization and 
prescribing of drugs in a way that can be an abuse of the patient. I 
would appreciate hearing from medical experts whether the following 
data can be explained by good medical practice, or whether it is 
another example of pharmaceutical company success in using price 
differentials to shape prescribing patterns, which may, or may not, be 
good for the patient.
  For example, in 1995, Medicare paid $3.11 a unit for the inhalation 
drug Ipratropium Bromide. That's exactly what it cost the doctor at 
wholesale, and total Medicare usage and expenditure on the drug was 
only $14,426,108.
  In 1996, a `spread' developed between what Medicare paid ($3.75 a 
unit) and what the doctor paid, $3.26 a unit, and utilization went to 
$47,388,622.
  In 1997, Medicare paid $3.50 but doctors only paid $2.15 and 
utilization doubled, to $96,204,639.
  In 1998, the spread increased as Medicare paid $3.34 but doctors 
could get the drug for $1.70, and utilization doubled again, to 
$176,887,868. Does anyone really believe that the need for this drug 
doubled in one year?
  The data is just in for 1999, and shows that the spread and usage 
widened again: Medicare paid $3.34 a unit. Doctors could get the drug 
for $1.60 a unit, and Medicare spent $201,470,288 for Ipratropium 
Bromide.
  The abuse of the taxpayer in this situation is serious. But what is 
even more serious is the question that must be raised about the doctor-
patient relationship and whether patients can trust doctors to 
prescribe appropriately when they can make 108% profit on the 
prescription of a drug?

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