Williams: Cut out the smoke and mirrors on drug prices
New Hampshire seniors deserve better than another Big Pharma bailout
New Hampshire has the nation’s second-oldest population, and polling shows one in four Americans cannot afford the drugs they need to live healthy lives, or even stay alive. With the majority of New Hampshire’s older adults relying on several different drugs per day while living on fixed incomes, the problem is especially critical.
For example, Namzaric, which combines two drugs that may help treat dementia, costs around $500 a month. These crushing costs are unbearable for many in a country where 40% of all citizens – according to the Federal Reserve – can’t even afford an emergency expense of $400.
The late Sen. John McCain was among those so frustrated with soaring drug prices that he urged the Trump administration to allow reimporting the U.S. drugs we send to Canada, where they are sold far cheaper. Recent efforts in Washington to bring down drug prices are a welcome sign for older adults and their health care providers in the Granite State.
The administration has rhetorically pledged to take the fight to the pharmaceutical industry, while Congress has held numerous hearings, and considered proposals, on the issue. Perhaps we can hope Washington will finally hold Big Pharma accountable for price-gouging the American people.
However, many are also rightfully unnerved by the administration’s latest Rebate Rule proposal, which would eliminate the ability of pharmacy benefit managers (PBMs) to negotiate rebates with drug makers on behalf of Medicare recipients.
PBMs represent the only check on pharmaceutical manufacturers’ control over prices, and they play a crucial role in Medicare Part D drug pricing, which helps our nation’s most vulnerable seniors and people with disabilities afford their life-saving medications.
Seniors benefit from the PBM-negotiated discounts on drugs with lower out-of-pocket costs, and removing that benefit will leave them with unsustainable financial pressure.
According to federal analysis, Medicare Part D premiums will increase by 25% as a result of this rule. Additionally, the administration admits this would increase federal spending by $196 billion from 2020–29. It does not make sense to bill taxpayers $200 billion to fund a rule that raises Medicare premiums.
Another flaw in the Rebate Rule is that its only benefactor is the pharmaceutical industry. Big Pharma spends millions in Washington each year lobbying for its own special interests, and this rule is certainly one of them. Drug companies have successfully pushed the blame for their high drug prices onto PBMs and derailed congressional progress on this important issue. The federal report estimates that the Rebate Rule will hand Big Pharma, one of the most profitable and powerful industries on earth, a $100 billion bailout. No wonder Big Pharma, the same folks who gave us the opioid crisis, is cheerleading this latest “reform.”
The transparency of this giveaway, engineered by Health and Human Services Secretary Alex Azar – a former Eli Lilly executive known for raising the price of insulin – is so great, and the pain to those on Medicare so evident, that some in the administration are pushing to delay it until after the 2020 election.
In an ideal world, we might not have PBMs, but we need entities with the scale to negotiate with massive drug manufacturers whose lobbying has ensured Medicare is prohibited from negotiating prices directly. Older Americans deserve better than unaffordable medications and cheap tricks; they deserve quality, life-saving drugs at affordable and fair prices.
The Rebate Rule raises premiums for Medicare recipients, increases federal spending and gifts Big Pharma with another billion-dollar bailout. It harms everyone except the shareholders of huge drug companies. Washington would be wise to reject this rule and shift its focus back to market-based solutions that will increase price transparency and boost competition.
Brendan Williams is president/CEO of the New Hampshire Health Care Association.