Call goes out for lower-cost prescription drugs

Apr 16th, 2019 | By | Category: News

A nationwide campaign by AARP is aimed at driving down the cost of prescription drugs by advocating for action by regulators and lawmakers, including at the state level in Washington.

“Americans pay the highest brand-name drug prices in the world,” said Doug Shadel, AARP’s state director in Washington. “Congress, the Administration, and our own state legislators must take action now to lower prescription drug prices, the root cause of this problem.”

According to the AARP Public Policy Institute, many prescription drugs have had substantial retail price increases every year since at least 2006. In 2015, retail prices for more than 750 prescription drugs commonly used by older adults increased by an average of 6 percent, more than 50 times higher than the general inflation rate of 0.1 percent. 

As part of its newly launched “Stop Rx Greed” campaign, AARP conducted a national survey of likely voters ages 50 and older. The poll found that majorities of self-identified Republican, Democrat and independent voters shared concerns about the high price of drugs and support common-sense policies that will lower prices.

Survey findings include:

• 72 percent are concerned about the cost of their medications.

• 63 percent say the cost of prescription drugs is unreasonable.

• 90 percent support allowing Medicare to negotiate for lower drug prices. 

• 80 percent take at least one prescription medication.

• Nearly 40 percent didn’t fill a prescription, mainly because of the cost.

Under federal law, the U.S. Department of Health and Human Services is prohibited from negotiating directly with drug manufacturers on behalf of Medicare Part D enrollees.

The Kaiser Family Foundation, a non-profit organization that tracks national health issues, reported in 2018 that 92 percent of the public supports the federal government negotiating drug prices for Medicare beneficiaries.

Through national television, radio and digital ads, editorial content, e-mail, social media posts, advocacy and grassroots activity, and a petition calling on Congress and the Administration to take action, AARP is pushing for policy solutions at the national and state levels. AARP calls for allowing Medicare to negotiate for lower prescription drug prices and for states to negotiate lower prices with drug companies, giving states legal authority to challenge price increases, closing loopholes that keep lower-cost generic drugs off the market, and capping consumers’ out-of-pocket costs.

In Washington, AARP is backing Senate Bill 5292, which was introduced in this year’s session of the Legislature to increase transparency around prescription drug price increases. The measure, if passed into law, would require the state Health Care Authority (HCA) to compile an annual list of 10 prescription drugs that have a significant impact on state expenditures but are critical to public health. Drug manufactures would need to justify price increases for those drugs to HCA. 

Also under SB 5292, which Shadel calls “a step in the right direction,” insurance companies and pharmacy benefit managers would have to provide information such as rebates received and retained, lists of the costliest prescription drugs, and the impact of prescription drug price increases on premiums.  HCA would provide annual reports to the Legislature on the overall impact of drug costs on healthcare premiums.

As of March 16, SB 5292 had been approved by the Senate. It needed to pass in the House of Representatives before it could be sent to the governor and signed into law. The regular session of the Legislature is scheduled to end April 28.

The legislation’s sponsor, state Sen. Karen Keiser of Des Moines, said it “will go a long way toward revealing the real cost of prescription drugs. As things stand, we really don’t have publicly available drug pricing information. It’s past time to shed some light on this industry. People should be able to know what the prescription drugs that they need and pay for actually cost to make and distribute.”

Pharmaceutical Research and Manufacturers of America (PhRMA), which represents the country’s largest biopharmaceutical researchers and biotechnology companies, has stated that while the companies set the list price for a brand medicine, 40 percent of a medicine’s list price is given as a rebate or discount to the government and middlemen, such as insurers and pharmacy benefit managers. Insurers negotiate large rebates but don’t share the discounts with patients who pay a deductible or co-insurance — a percentage of costs a patient is responsible for paying out of pocket — for their medicine. Ultimately, insurers determine what a patient pays out of pocket, according to PhRMA.

PhRMA also says the share of healthcare spending attributable to medicines in the United States is in line with Canada, France, Germany and Japan. Foreign governments often set prices and restrict coverage as a condition of entering the market, while the U.S. relies on the marketplace to control costs, PhRMA said.

“Drug companies are making BILLIONS in profits off seniors and hardworking Washingtonians. That’s just wrong, and something has to change,” said AARP’s Shadel. “We need to do more to hold drug manufacturers and insurance companies accountable for skyrocketing prices.”

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