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Patients Driving Higher Drug Costs

The pharmaceutical industry has the largest profit margin (18.6%) of any industry in the U.S. -- and believe it or not, the consumer may be as much to blame as the industry.


The fact is, the price of existing drugs isn't shooting up. It's the new drugs -- fancy name brands with fancy new ad campaigns. These new drugs cost, on average, three times as much as similar, older generics, reports CBS News Correspondent Diana Olick.


But the advertising seems to compel patients to seek out the newer drugs.


"People are bombarded by advertisements which tell them the glowing attributes of all these new medicines," says Dr. Raymond Woosley of Georgetown University Hospital.


And, Woosley says, "They come to you as a physician and say, 'I want this medicine.'"


Pharmacist Alan Holmer says, "I don't hear patients complaining about direct-to-consumer advertising."


He says, "They crave this information that will allow them to have more informed conversations with their doctors."


And pharmaceutical companies are pouring money into direct-to-consumer advertising -- 40% more in just the last year, to nearly $2 billion -- because it works.


"When you try to talk to that patient and explain to them that here's an older medicine that will work 90 percent of the time just as well without any problems and at far less cost to you and your insurance company, many times they don't like that message," says Dr. Woosley.


But newer isn't always better. Take the new class of pain killers, that includes Celebrex and Vioxx. Some doctors say they're no better than ibuprofen. But they cost ten times as much, and they're selling fast.


"A lot of people are spending a lot more money believing they are getting a superior pain and inflammation reliever, but the evidence to support that is just not there," according to Dr. Sharon Levine of Kaiser Permanente, the nation's top not-for-profit HMO.


Yet people see these ads on television, they want it and they ask their doctors for it. But does that mean the public is as much to blame as the pharmaceutical companies for the increasing costs?


"When we go to our physicians and demand these new medications, we're driving the market, so in that sense yes, we are the problem," says Dr. Woosley.


Now some doctors, fed up with the effect these ads are having on patients and drugs, are calling for comparison studies on old and new drugs. Blue Cross/Blue Shield plans to start next month.


Dr. Levine has a couple of questions they can start with.


"Are we getting a dollar's worth of health value for every dollar we're spending? And are we getting the right drugs to the right people in order for them to take advantage of it?"


Or, are consumers getting roped into the latest designer trend, and buying into the classic consumer motto that if it costs more, it must be better?

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