Ranking Political Pitches Aimed at Reducing Drug Costs

Fran Quigley

The cost of medicines is a top priority for the new US Congress according to a post-election Harvard poll. Each year, one in five Americans skips doses or fails to fill prescriptions because of the inaccessibly high prices, denying people their rights to healthcare. Medicines are priced as high as $750,000 per patient, and costs for many drugs have doubled or even tripled in recent years.

When public outrage builds, politicians scramble to respond. That is especially true for those considering a 2020 run for President, some of whom have rolled out proposals to lower prescription drug prices. But this in itself does not necessarily translate to big changes. The pharmaceutical industry is at the top of the spending lists for both political campaign donations and lobbying, and they are desperately deploying these resources to keep and defend the windfall profit status quo. But popular pressure is building, and politicians would rather lose campaign contributions than elections.

The US prescription drug pricing crisis is complex because of patent law, government regulation, and the lack of transparency about the pharmaceutical sector’s true costs and pricing processes. Following is my ranking of politicians’ proposals to lower drug prices.

FOUR STARS: Take Away Drug Patents if Prices are Too High 

Senator Bernie Sanders and Rep. Ro Khanna’s Prescription Drug Price Relief Act takes aim at the very heart of the drug pricing crisis: the government-granted monopolies (even on medicines discovered with government-funded research) that allow pharmaceutical companies to price medicines produced cheaply at a markup of 1,000 times or more.

This process would bypass patent protections to allow generic competition on medicines that are “excessively priced,” in comparison to their prices in similar countries like Canada, the UK, and Japan.

THREE STARS: Allow Medicare to Negotiate the Cost of Medicines It Purchases 

The United States pays the highest drug prices in the world because it is the only country that prohibits its government from using its purchasing power to negotiate down prices. (Evidence of the effectiveness of Pharma’s powerful lobbying.) Unshackling the Medicare Part D program’s negotiating power has broad popularity outside of the halls of Congress—92% of Americans support it and President Trump campaigned on it. It is the subject of bipartisan support, including a bill by Rep. Lloyd Doggett and Sen. Sherrod Brown. But Trump has backed away from that campaign promise, and it may take a Senate power shift to see this happen.

THREE STARS: Allow the Government to Make Some Medicines

The Affordable Drug Manufacturing Act sponsored by Senator Elizabeth Warren and Rep. Jan Schakowsky would create an Office of Drug Manufacturing. The new agency would respond when there are failures in the hoped-for competitive market for generic drugs, such as when there are too few companies competing.

Generic medicine costs are usually not the biggest contributor to high drug costs. But this proposal earns three stars for pushing forward a solution that bypasses for-profit systems and for specifically targeting insulin, where three manufacturers have raised their prices in lock step for decades. It is proposed the government could support additional manufacturers or produce medicines itself.

TWO STARS: State-Level Action

State governments’ obligations for Medicaid and the cost of healthcare for state employees and prisoners mean state budgets include more than $20 billion a year for prescription drugs. According to the National Academy of State Health Policy, 28 states passed 45 laws last year aimed at curbing drug prices.

States are pushing for transparency in corporations’ decisions on price-setting, reducing the cut taken by middlemen pharmacy benefit managers, and importing medicines from countries where prices are far lower. Real change has to happen at the federal level but importing would underscore the rigged nature of US drug pricing and help build momentum and local level activism.

TWO STARS: Block Unjustified Price Increases

The CURE High Drug Prices Act, introduced by several senators, including likely presidential candidates Kamala Harris and Amy Klobuchar, would empower the Department of Health and Human Services (HHS) to review price increases of more than 10% per year. HHS could then force unjustified prices to be lowered and reimbursements made to patients. This could help block huge spikes, but 10% per year increases add up quickly, and this does not address the current high prices.

ONE STAR: More Transparency with State Medicaid

In 2017, Senator Cory Booker found himself on the wrong side of the drug pricing backlash after a pro-Pharma vote earned him the ire of Democrat allies and activists. Booker had a quick change of heart, and now supports the Medicaid Drug Decisions Transparency Act.

The bill requires drug companies to disclose their payments to all who serve on the boards that decide states’ Medicaid drug coverage. This is well-justified, but not likely to lead to significant, immediate change.

ONE STAR: Lower Medicare Part B Drug Costs/Require Rebate Reform

Medicare Part B covers the often enormously high cost of drugs administered directly by physicians. Trump, who has said drug companies are “getting away with murder,” has proposed lowering those costs by 30%  by comparing the Medicare prices to the cost in other countries. He has also proposed reducing the role of the pharmacy benefit manager “middlemen” in the drug pricing process, but blaming the middlemen is the top Big Pharma talking point for a reason. Manufacturers are far and away the most responsible for high drug prices, and the Trump plan lets Big Pharma off the hook.

ONE STAR: Litigation and Investigations

Lawsuits and government investigations in multiple states are focused on alleged price-fixing in prescription drugs, with particular attention to insulin. None has yet yielded a verdict or a significant settlement. The problem is the difference between what legal in the US—yet is clearly immoral in its impact on violating people’s rights to health care and treatment.

Conclusion

From one star to four, none of these proposals would single-handedly make prescription drugs immediately affordable for all. And few of the proposals stand any real chance of coming into effect in the next year or two. There is some bipartisan Congressional support for less ambitious (one to two-star range) changes. For example, Senate Finance Committee Chair Sen. Chuck Grassley is on record in support of limiting restrictions on individuals importing cheaper medicines from Canada and removing barriers to generic competitors reaching the market.

But if Americans impacted by prescription drug price-gouging, or concerned at the human rights failings, keep raising their voices, more significant change may eventuate.

Fran Quigley is director of the Health and Human Rights Clinic at Indiana University McKinney School of Law and editor of the new weekly newsletter Faith in Healthcare, in which a version of this blog was originally published. Email: fwquigley@gmail.com