Unfortunately, public scrutiny about high drug prices doesn’t usually lead to legislative fixes, such as passing legislation that would allow Medicare to negotiate drug prices with the pharmaceutical industry and expand the practice of safe personal drug importation so more consumers access lower prices from foreign pharmacies. On the other hand, a New York Times article – “Even Talking About Reducing Drug Prices Can Reduce Drug Prices” – suggests, well, that “talking about” drug prices can reduce them, because pharma executives get scared that if they don’t moderate drug prices, more permanent and progressive fixes will finally happen.
The New York Times gives one major example, citing a new study at MIT. Drug price increases were on a tear throughout much of the 1980s and into the early 1990s, increasing at three times the rate of inflation. Then, in 1993, former First Lady (then senator, then Secretary of State), now presidential candidate, Hillary Clinton began to push for universal healthcare with legislation that the drug companies feared would permanently crimp their profits. At that time, a loud swell of criticism was being lobbed at drug companies (sound familiar?). The MIT study asserts that political pressure mounted enough to scare drug companies so that drug price increases were close to the inflation rate throughout much of the 1990s – only to accelerate once again in the new millennium.
I tend to agree with the gist of the article but the title is too tame, and not representative of what is going on. Just “talking about” drug prices is one thing, lambasting “Big Pharma” and greedy executives with the poster child du jour being Martin Shkreli is another. Presidential candidates have slammed the pharmaceutical industry for greed, corruption, and fraud this past year. The most outspoken have been Democratic candidates Secretary Hillary Clinton and Senator Bernie Sanders, but even Republican Senator Marco Rubio referred to “pure profiteering” when describing the bad actors in the pharmaceutical industry.
The grilling continues next week when pharma executives come before the House Committee on Government and Oversight to explain drug price increases of hundreds and even thousands of percent on drugs such as Daraprim, Isuprel and Nitropress. On that note, Martin Shkreli, who is already under indictment on charges of fraud relating to his tenure managing a hedge fund, was subpoenaed by the committee but his attendance is not certain at this time.
If all of this talking helps put the brakes on drug price increases, then let’s talk more and get louder, but don’t discount (no pun intended) the fact that pressure can lead to major legislative changes. Let’s face it: Americans want and need real and lasting change to bring drug prices more in line with other advanced economies, such as Australia, Canada, and the United Kingdom. And it’s possible! Recall that seniors did not have a pharmacy benefit as part of Medicare at the beginning of the last decade – that’s why they started buying medication online from Canada and other countries, despite federal restrictions against the practice. In fact, it was advocacy by groups like AARP and Families USA for policies to expressly permit prescription drug importation and allow Medicare to negotiate drug prices that led to the passage of the Medicare Improvement and Modernization Act of 2003, the law that gave seniors a prescription drug benefit now known as Part D.
While drug companies, through lobbying, controlled the legislative process back in 2003 so that taxpayers now bear the burden of higher drug costs (associated with Part D plans) while their access to lower cost foreign pharmacies remains restricted, the new pharmacy benefit for seniors represented real change and has helped tens of millions with their drug bills over the past decade. With the volume rising louder than ever against high drug prices in America, and the pharmaceutical executives who make them, it’s highly conceivable that real change is coming again in 2016 – and maybe, just maybe, Big Pharma will play a smaller role affecting that change.Tagged with: Bernie Sanders, Big Pharma, Drug Prices, Hilary Clinton, House Committee on Government and Oversight, Marco Rubio, Martin Shkreli, Medicare Improvement and Modernization Act of 2003, Medicare Part D, New York Times