News Journal: Our dysfunctional government should at least be able to lower drug prices

Ted Kaufman is a former U.S. Senator from Delaware.
I went to Walgreens last week to pick up my three-month supply of a prescription I have been using for years. Ho hum.
Until I saw what it was going to cost.
All of a sudden the price had gone up by more than 20 percent. I paid it, of course, grumbling. But I decided to do some research into what’s going on with America’s prescription drug prices.
Bloomberg News looked into drug prices last year and found that “255 brand name drugs had increases between Feb.1 and July 13 … the most common increase was for 9 to 10 percent.”
It also tracked the prices for 40 commonly used drugs in six categories — diabetes, cancer, HIV, multiple sclerosis, asthma and chronic pulmonary disease, and autoimmune diseases such as rheumatoid arthritis and psoriasis — over a three-year period from June 2015 to June 2018. During this period the consumer price index went up by 5.6 percent.
“For all six categories of drugs,” Bloomberg found, “list prices rose far faster than inflation.”
“Prices for 10 commonly used diabetes drugs rose 25.6 percent, on average, while average prices for rheumatoid arthritis and other autoimmune treatments rose 40.1 percent. The latter category includes AbbVie Inc.’s Humira, the biggest-selling drug in the world. Prices for the injection soared 52 percent on five separate price increases. Another drug with an unusually big increase in the period was Bayer AG’s liver cancer pill Nexavar, whose cost rose 51 percent on six separate price hikes, to $155.59 per pill, according to Connecture. Nexavar now costs $18,670 per month for patients who take the typical dose.”
In a report early this month, the Wall Street Journal reported “Pharmaceutical companies are ringing in the new year by raising the price of hundreds of drugs, with Allergan PLC setting the pace with increases of nearly 10% on more than two dozen products, according to a new analysis.”
Why do the pharmaceutical companies raise prices? Not because of increased manufacturing costs. And not because they have to cover additional research expenses, the excuse they trot out at every opportunity.
They raised prices for only one reason: They could.
Johns Hopkins Professor of Health Policy and Management Gerard Anderson says, “Research and development is only about 17 percent of total spending in most large drug companies. Once a drug has been approved by the FDA, there are minimal additional research and development costs, so drug companies cannot justify price increases by claiming research and development costs.”
There have been a lot of news stories lately about diabetics dangerously cutting back on their insulin injections because they simply can’t afford them any longer. We may not all be affected to that degree, but a groundswell of public opinion about drug prices is finally getting the attention it deserves.
In fact, the issue may be the only one that has genuine bipartisan support in Washington.
Senate Finance Committee Chair Chuck Grassley, R-IA, and potential Democratic presidential candidate Senator Amy Klobuchar, D-MN, have introduced a bill to allow the importation of drugs from Canada for personal use. Grassley has also said he will consider two bipartisan bills.

One would stop brand name drug manufacturers from subverting competition in the pharmaceutical marketplace. The other would prevent brand name drug companies, when their patents run out, from paying generic manufacturers to delay their production of competitive generic drugs.
Senator Bernie Sanders, I-VT, and influential Rep. Elijah Cummings, D-MD, have introduced bills very similar to Grassley-Klobuchar, but added two additional proposals.
One of them, in a rather surprising way, would be very similar to an initiative advanced by the Trump administration. It would use the average of a drug’s price in a number of foreign countries, prices that are always lower than current U.S. prices because they are controlled by the government, to set Medicare prescription drug prices. The reduction in price would be dramatic in many instances.

Their second proposal would empower the Secretary for Health and Human Services to negotiate Medicare Part D prices that helps seniors pay when they buy self-administered drugs like those bought at drugstores.
The current secretary, Alex Azar, appeared on Fox Business News and said, “I want to be really clear to the pharma companies out there and to the pharmacy benefit managers: The President and I will not stop until list prices of drugs come down. This behavior has to stop. Drug prices must come down. And we will roll out more regulatory and legislative proposals, and we will work with Democrats and Republicans to get drug prices down.”
Is it going to happen? The latest Politico-Harvard poll found that “90 percent of Democrats and 82 percent of Republicans say taking action to lower prescription medicine prices is extremely important, ranking as the top issue for both parties.”
Given that overwhelming support, in normal times the president of the United States would have no trouble sitting down with Congressional leadership and working out bipartisan legislation that would sail through the Congress and become law.
Your guess is as good as mine about what will actually happen. But we can hope, and lowering drug prices would at least be a sign that even now our government can do something positive for all of us.

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