The Battle Against Drug Companies’ Inhuman Prices
David is taking on Goliath Right Now in Congress
Prescription drugs or food? Is a life-saving drug worth the pain of crushing debt? We all know the stories because we and our families and friends have lived them. It’s the “financially toxic” dilemma too many households face. Overall health and economic health shouldn’t be mutually exclusive. In 2021, no one should have to sacrifice one to maintain the other.
Maureen Allen understands the predicament of choosing between prescription drugs and food. Maureen pays so much for medication to battle blood clots in her left leg and lungs that she has decided to “give up food.” She eats one meal a day and drinks tons of water because it fills her up. Maureen’s story was a key part of my testimony before the House of Representatives Education and Labor Committee this past May because members of Congress need to hear how much trouble people in America are having paying their bills.
There are millions of people like Maureen from across the country. No one is immune to soaring drug prices. Even worse, the pharmaceutical industry’s predatory practices widen the health equity gap for vulnerable people — disproportionately impacting Black, Latino, and Indigenous communities and perpetuating systemic racism that plagues families of color. We’re fighting a modern-day Goliath and his well-staffed legion of lawyers and lobbyists just to keep people healthy and alive.
This is so much more than a political campaign rally applause line. It’s affected generations of families and cost millions of lives, yet there hasn’t been any major, transformative change … until now. We finally have a rare chance to disrupt the health care industrial complex. A real opportunity to enact strong, comprehensive drug-pricing reform to lower both drug prices and patient costs. But the clock is ticking.
We have a chance to bypass the typical stalemate and actually accomplish something through Congressional “reconciliation” efforts. President Biden even made a speech a few weeks ago going all-in on this effort. But time is not on our side. The fight in Congress is underway right now. We’ve got to get this done.
What would a comprehensive solution look like? Here are five key, common-sense elements which would lower prescription drug prices and patient costs and address the real problems families across the country face day to day:
· Empower Medicare to negotiate drug prices. Medicare accounts for nearly one of every three dollars spent on retail prescription drugs. That kind of bulk buying translates to bargaining power, but the Department of Health and Human Services, which oversees Medicare, is legally barred from negotiating prices thanks to Pharma’s lobbying power. This change alone could save nearly a half-trillion dollars over 10 years. And just as important is making sure that the costs that Medicare recipients will save aren’t simply transferred to everyone else.
· Include “launch” prices in the negotiations. Some prescription drugs start wildly overpriced — way beyond what’s needed to recoup research and development costs. Any legislative solution to the drug cost problem must specifically include provisions focused on initial pricing.
· End price-gouging. Companies often raise the prices of existing drugs much faster than the rate of inflation. Given that drugs’ initial price tags are supposed to cover development and manufacturing costs, there’s no plausible reason for this beyond grabbing for every last buck. In the end, this leaves families in the U.S. routinely spending double — or more — on prescription medication than those in other countries. Americans pay, on average, seven times more for drugs than families in Japan.
· Spread the savings. The savings Medicare can achieve at the bargaining table should benefit all Americans. The age group most likely to report having trouble affording their prescription drugs is those aged 50–64 — who don’t typically qualify for Medicare. Every American should be protected, including the 160 million people who get health care coverage through their employer.
· Incentivize innovation and end patent abuse. Drug companies rigging the system to extend their patents endlessly only increases costs for everyone. This doesn’t just create a financial crisis for families, it also incentivizes companies to invest in slick lawyers to game the system, not real innovations that save lives. We should ensure that pharmaceutical companies make justly deserved profits for new and innovative drugs, not for repackaging their current stock.
This shouldn’t be a heavy lift. Legislation to lower prescription drug costs attracts broad political support — upwards of 90 percent among Republicans, Democrats, and Independents alike — and consistently ranks atop voter priorities to get done this year. After all, sooner or later everyone has to take a prescription drug (most U.S. adults take at least one) so this problem doesn’t neatly break down along party lines. One in three adults — roughly 80 million people — have had to skip doses of their medication because of the cost; one in five — 50+ million Americans — have had to forgo their prescription drugs altogether because they couldn’t afford them. One recent study estimated that if we don’t change course, 112,000 seniors will die annually by 2030 just because they can’t afford to pay for medicine.
There is no question. This is a national disgrace.
Defenders of the status quo claim that drug companies must charge these outrageous sums because developing wonder drugs costs money. Modern medicine is miraculous, and businesses expect to recoup the cost of developing it while turning a reasonable profit. But that’s not what’s going on: the 14 leading drug companies spent more than a half-trillion dollars between 2016 and 2020 on stock buybacks and dividends — $56 billion more than they laid out for R&D. So, let’s face it, this is really about ensuring drug company executives continue to receive tens-of-millions of dollars in outrageous salaries and bonuses. At the same time, they’re gaming the system to extend their patent protections — and the monopolies that allow them to charge exorbitant amounts — indefinitely, a trick called “evergreening.” One 2018 study found 78 percent of drug patents are not for new drugs but for minor modifications to existing ones and that the problem was worsening.
These five simple steps would ensure real savings for average Americans. They would pay less for prescription drugs, and the hundreds of millions of dollars Uncle Sam would save could be used to help lower other patient costs. And, just maybe, the prescription drug companies will get a little more focused on innovating to save lives and a little less focused on gaming the system to drive up their already astronomical profits. It’s the kind of prescription America must fill.
