AARP Hearing Center
“During the years 1958 and 1959,” Dr. Ethel Percy Andrus, AARP's founder, recalled, “our members wrote enthusiastically about the relief secured by our insurance protection, but thousands protested the high cost of drugs.” In response, AARP and its sister organization, the National Retired Teachers Association (NRTA), introduced another game-changing member benefit — the nonprofit AARP/NRTA Drug Buying Service — late in 1959. Like the AARP/NRTA group health plan, the Drug Buying Service demonstrated the collective purchasing power of the associations’ members. “The purpose of our Drug Buying Service,” Dr. Andrus explained, “is to always save you at least 25 percent on all purchases.... We can do this because our Drug Buying Service serves all 150,000 members of AARP and NRTA. This permits us to buy direct from manufacturers at maximum discounts.”
The Service fulfilled prescriptions (except those containing narcotics) and offered standard drug items, such as aspirin, cold remedies and vitamins and drug sundries, such as bandages, cotton, diabetic supplies, etc. It fulfilled orders by mail nationwide and at storefront pharmacies in several cities, the first two being Washington, D.C., and Altadena, California.
The Drug Buying Service introduced an element of competition and price relief into the U.S. pharmaceutical market that had not been seen before. By December 1959, the Drug Service was filling more than 1,000 orders a day.
Growing nationwide concern about high drug costs prompted Congress to investigate the pharmaceutical industry’s practices. Senator Estes Kefauver led the way, holding hearings between 1959 and 1962 that helped catapult AARP and Dr. Andrus into the national spotlight. Dr. Andrus testified four times, emphasizing efforts by AARP/NRTA to provide quality drugs at lower costs.
In a Dec. 13, 1961, statement before Senator Kefauver’s Judiciary Subcommittee on Antitrust and Monopolies, Dr. Andrus chided organizations that she said “resent our entry into the drug field.”
“It has long been recognized that one of the greatest expenses for retired persons living on restricted budgets is the high cost of drugs and prescriptions.... The AARP/NRTA Drug Buying Service is our answer to the problem of meeting the high cost of drugs on a fixed income.”
“We ask for no favors or concessions,” she testified. “We pay more than the going wage to our pharmacists. We conduct an ethical pharmacy. We... merely share our potential profits with our members to keep them self-supporting on a limited income .... Can they themselves propose a better plan to serve the drug needs of older people with meager incomes?”
In 1962, with AARP’s backing, Congress passed Senator Kefauver’s bill to promote greater use of generic prescription drugs and enhanced safety testing by the Food and Drug Administration.
