Hinchey also discussed a survey he released last year that showed that seniors without prescription drug insurance must pay nearly twice as much for prescriptions as the drug companies' most favored customers, like HMOs and large insurance companies. As the Federal Trade Commission pointed out earlier this year, the drug manufacturers have a two-tiered pricing structure. The pharmaceutical companies offer deep discounts to their most favored customers and charge lower prices in countries where price gouging is against the law. But they keep their profits sky-high by charging outrageous prices on medications for the elderly. Their scheme is working - pharmaceutical manufacturers are the most profitable sector of American business.
Seniors are particularly vulnerable to high drug costs.
Older Americans have more medical problems and take more prescriptions than the average American. Medicare, the main source of health coverage for the elderly, does not provide prescription drug coverage in its standard benefits. Thirty-seven percent of seniors have no insurance coverage for prescription drugs and must pay the full price. Older Americans spend almost three times as much of their income on health care than people under 65 do. According to the AARP, more than one out of eight seniors have been forced to choose between buying medicine and buying food.