Senators urge pharma CEOs to rein in lobbyists
The CEOs of seven major pharmaceutical companies are facing a hostile grilling from senators over high prescription drug prices that are a drain on Medicare and Medicaid and a burden to millions of Americans. (Feb. 26)
Editor's note: The Des Moines Register is partnering with AARP on a series of forums with presidential candidates between July 15 and 20.
AARP is fighting to lower prescription drug costs – for everyone. We have pursued new laws that would get generic drugs to market faster, allow the safe importation of medicines from Canada, and permit Medicare to negotiate drug prices for seniors. We also are advocating for an out-of-pocket cap to improve the Medicare Part D drug benefit we helped pass in 2003.
This February, Senate Finance Committee Chairman Chuck Grassley and colleagues from both parties grilled pharmaceutical CEOs on skyrocketing drug prices. What have we learned at that hearing and since?
· Americans pay the highest prescription drug prices in the world, frequently triple what people in Canada pay – “for the exact same drugs, often made in the exact same place,” as President Trump said in his State of the Union Address;
· The average cost of a brand name medicine in the U.S. more than tripledover the last decade;
· And list prices for specialty drugs have exploded. The average annual cost in 2018 was $79,000, more than most people’s yearly incomes.
Meanwhile, Big Pharma is prospering:
· The companies that testified before Congress have a collective market value of $1.13 trillion;
· The pharmaceutical industry is the top spender on lobbying in D.C.;
· And many pharma CEOs are paid $25 million-$30 million annually.
With so much to gain or lose, Big Pharma is on the attack, and AARP is its most recent target. It’s interesting that you never hear them make the argument that there is no problem or that drug prices aren’t way, way too high. No one would believe them.
Now, Big Pharma is using its war chest to shift the spotlight. A favorite focus is the pharmacy benefit manager, or PBM – the part of insurance that negotiates your drug prices and may decide your copay – because it keeps attention off the root cause: the list prices of medicines, which Big Pharma sets.
Let’s be clear. One, there are no angels in the multi-billion-dollar prescription drug supply chain, and AARP has supported drug cost several reduction laws where PBM reform is included.
Two, well-meaning policymakers can get caught up when Big Pharma spends millions to deflect and cherry-pick facts.
Three, when Big Pharma claims it has a money-saving “reform,” be sure to keep an eye on your insurance premiums and taxes. For example, the nonpartisan Congressional Budget Office has predicted that the recent PBM “reform” supported by Big Pharma would raise all seniors’ Part D premiums, cost Medicare nearly $200 billion, and have no impact on drug prices. Medicare’s Office of the Actuary has predicted that “The pharmaceutical manufacturers would benefit from the proposed rule overall, even as list prices were reduced.” So the “reform” would essentially shift costs within the system, to the benefit of … yup, Big Pharma.
AARP has stood up to Big Pharma and insurance companies alike. For example, we have fought for health insurance reform, against the Age Tax (where older people could pay up to five times what younger people pay for insurance), and for pre-existing condition protections. The well-being of Americans age 50-plus is our focus.
When Big Pharma attacks us, we wear it as a badge of honor. They are on the run, because so far this year, there are 27 new laws across 16 states to help reduce drug costs, and federal action is brewing.
We appreciate the efforts so far of President Trump, Chairman Grassley, Sen. Joni Ernst, Rep. Cindy Axne and others on both sides of the aisle working to lower drug costs. We’re working with them and look forward to working with Iowa state leaders on solutions to high drug costs because Iowans shouldn’t be paying the highest prices in the world.
