Drug Pricing - Questions & Answers
1. Do prescription drugs really cost less in Mexico and Canada?
In fact, many things are less expensive in both Mexico and Canada than they are in the United States. In Mexico, average incomes are about one-third of what they are here. As a percentage of total income, the average Mexican pays twice what the average American does for pharmaceuticals. As recently as two years ago, Canada's per capita average income was 13 percent lower than that of Mississippi, the poorest U.S. state. The average Canadian spends roughly the same fraction of his or her income for many prescriptions, at the lower Canadian prices, as the average American does.
There are other reasons why drugs appear to be less expensive in Mexico and Canada. One has to do with exchange rates. In recent years, both the Mexican peso and the Canadian dollar have lost value relative to the U.S. dollar. When a foreign currency depreciates, prices of goods in foreign countries go down relative to their prices in the United States. In addition, some drugs cost less in Canada due to government price controls. In Canada, as in many other countries, bureaucrats dictate which medicines will be reimbursed and which will be approved. Wherever such a system has been instituted, it has led to lengthy delays in the approvals of cutting-edge medicines that are available almost immediately in the United States. Price controls also devastate the research and development of new pharmaceuticals.

2. How many seniors have prescription drug coverage?
a) 12% b) 42% c) 66%
The correct answer is c). Two-thirds of seniors already have some kind of drug coverage, which suggests that the current system works for most older people. Pfizer believes strongly that the 14.4 million seniors who currently lack drug coverage should have it. But instead of creating a vast government-run system for the 26 million seniors who are already covered, let's focus on those in need and address their problem. One way is through expanded insurance, with subsidies for the low-income elderly. Another way is to establish a tax credit or tax deduction that would effectively subsidize the cost of prescription drug insurance. A third solution involves federal grants to each state, which could be used to expand access either directly to low-income residents or through insurance.

3. Where do drug companies put their profits?
Contrary to a widespread misperception, profit rates in the pharmaceutical industry are no higher than in other successful industries.  Even so, this year Pfizer will invest virtually every dollar of its 1999 profit in research and development. That investment will go toward discovering innovative medicines to treat diseases such as cancer, Alzheimer's, AIDS, disorders of the central nervous system, cardiovascular disease, and diabetes. If Pfizer and other pharmaceutical companies were prevented from charging free-market prices for their medicines, they could not sustain their current level of R&D investment. And if that were to happen, many life-saving and life-enhancing medicines would go undiscovered.

4. Where can people in need get their medicines?
Pfizer, like most research-based U.S. pharmaceutical companies, provides its medicines at no cost to low-income, uninsured patients who otherwise might not have access to them. Our Sharing the Care program works in cooperation with a network of community-based health care centers across the United States. Since its inception in 1993, Sharing the Care has provided Pfizer medicines free of charge to more than one million people in need. The Pfizer Patient Assistance program operates through individual physicians who make Pfizer drugs available on a case-by-case basis to patients who need them. And our Diflucan® and Zithromax® assistance programs, also in cooperation with individual physicians, provide these medicines to qualifying patients.


http://www.pfizer.com/pfizerinc/policy/drugpricing.html