Big pharma's cash flood is drowning seniors

A new report from ...

Posted: Apr 4, 2018 8:11 AM
Updated: Apr 4, 2018 8:11 AM

A new report from Sen. Claire McCaskill, D-Missouri, confirms a deep-seated fear for many seniors: the prices of the 20 brand-name drugs that are most prescribed to them have skyrocketed. Over the past five years, the cost of these medications has risen an average of 12% per year, with some doubling in price. Earlier this month, the commissioner of President Donald Trump's Food and Drug Administration called prescription drug pricing a "rigged" system, blaming shady tactics aimed at reducing competition in the pharmaceutical industry.

Big Pharma is jacking up prices for one reason -- because it can. This is why the National Committee to Preserve Social Security and Medicare advocates that Medicare be required (or at least allowed) to negotiate prescription drug prices with Big Pharma -- an idea Republicans have by and large opposed since the Medicare Part D program was enacted in 2003. In fact, the original Medicare Part D legislation forbade the government from negotiating drug prices with manufacturers.

But a new bill introduced by Sen. Bernie Sanders, I-Vermont, Rep. Elijah Cummings, D-Maryland, Rep. Lloyd Doggett, D-Texas, and Rep. Peter Welch, D-Vermont, dubbed The Medicare Drug Price Negotiation Act of 2017, seeks to allow Medicare to negotiate prices with pharmaceutical companies. This is the legislation we need in order to keep drug prices affordable, and Congress should pass it.

Sen. McCaskill likened the perennial drug price hikes to paying an auto dealership a 20% markup on the same model car year after year. Seniors living on fixed income simply can't afford this -- and there are actual life and death consequences. According to a report by the Centers for Disease Control and Prevention, 2 million seniors did not take their medications as prescribed in 2015 due to medication costs. The dilemma of seniors having to choose between meals and pills is very real.

As the price of medications has soared, so have pharmaceutical company profits. Total sales revenue for top brand-name drugs jumped by almost $8.5 billion over the last five years. The Government Accountability Office (GAO) reported that 67% of drug manufacturers boosted their annual profit margins between 2006 and 2015 -- "with profit margins up to 20% for some companies in certain years."

Not only have pharmaceutical companies reaped outsized profits from these price hikes, so have their CEOs. According to a USA Today analysis, the median compensation package for biotech and pharmaceutical CEOs in the Standard & Poor's 500 was 71% higher than the median compensation for S&P 500 executives in all industries in 2015. The CEO of drugmaker Regeneron Pharmaceuticals earned a whopping $47.5 million that year, the top man at Merck pulled in $24.2 million, and the head of Johnson and Johnson received $23.8 million.

It's no mystery why the pharmaceutical companies almost always get their way in Washington. "The pharmaceutical and health products industry ... is consistently near the top when it comes to federal campaign contributions," reports the Center For Responsive Politics. Pfizer leads the pack, showering candidates with over $900,000 in donations during 2017 and 2018, with about 55% going to Republicans and 45% to Democrats.

Still, the Big Pharma cash flooding into Washington has not deterred some members of Congress from taking action to contain rising drug costs. The modification proposed by The Medicare Drug Price Negotiation Act of 2017 is essential to achieving true cost savings for the Medicare program and for seniors who have seen their premiums and copays continue to rise. If we do not allow Medicare to negotiate with drug companies, we will always be burdened with higher and higher costs.

If we want to bend the cost curve for prescription drug prices, we must also scrutinize Pharmacy Benefit Managers (PBMs) -- the middlemen between the insurance companies and pharmacies. Some PBMs excessively mark up the price of prescription drugs at the pharmacy counter and pocket the difference, including rebates, without publicly disclosing their pricing structures. Here, again, commonsense legislative remedies are readily available.

Sen. Ron Wyden, D-Oregon, and Rep. Doug Collins, R-Georgia, have each introduced bills to require greater transparency from PBMs about prices and profit schemes, which is a good start toward reining in these middlemen. Congress could also pass the bipartisan CREATES Act to make it easier for less expensive generic drugs to move through the FDA approval process and get to market more quickly.

Recent polling suggests that Americans are more than ready for corrective action. According to a recent poll from Politico and Harvard's school of public health, an overwhelming 90% of voters favor allowing the government to negotiate Medicare prescription drug prices. The 2018 elections present voters with an opportunity to insist that lawmakers act. If current members of Congress won't enact common sense remedies for what ails our prescription drug price system, let's elect candidates who will.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 313161

Reported Deaths: 3594
CountyCasesDeaths
Multnomah51245642
Washington34995276
Marion32577393
Clackamas26570271
Lane23989246
Jackson20977257
Deschutes16623102
Umatilla12602125
Douglas10712188
Linn1046886
Josephine8659165
Yamhill744999
Klamath643491
Polk623570
Malheur479467
Benton461927
Coos412069
Columbia324237
Jefferson313746
Lincoln276330
Union272737
Wasco239039
Crook212338
Clatsop211725
Tillamook181523
Baker174421
Morrow167921
Curry166817
Hood River163035
Harney78916
Grant7558
Lake6768
Wallowa50811
Gilliam1374
Sherman1283
Wheeler651
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4644566

Reported Deaths: 68019
CountyCasesDeaths
Los Angeles144512125852
Riverside3579884804
San Diego3495814009
San Bernardino3472035506
Orange3146225354
Sacramento1503072089
Santa Clara1405641841
Fresno1358611888
Kern1358421515
Alameda1162141329
Ventura976901120
San Joaquin973871615
Contra Costa95727924
Stanislaus806991234
Tulare72969896
San Mateo52239607
San Francisco51907605
Monterey49465565
Solano44151312
Santa Barbara43112500
Sonoma39441378
Merced39370535
Placer36487364
Imperial34261755
Kings30124284
San Luis Obispo28300313
Madera21707258
Butte21307230
Shasta20683276
Santa Cruz20151211
Yolo19143239
Marin17106242
El Dorado16004127
Sutter13094153
Napa1226895
Yuba926061
Nevada847685
Humboldt829587
Tehama823784
San Benito709067
Mendocino685575
Lassen637627
Tuolumne615393
Lake603687
Amador492259
Glenn398030
Siskiyou389541
Calaveras342266
Del Norte336034
Colusa290918
Inyo166539
Mono14935
Plumas12406
Mariposa99712
Trinity72010
Modoc6278
Sierra1980
Unassigned1650
Alpine1000
Out of CA00
Medford
Clear
61° wxIcon
Hi: 88° Lo: 46°
Feels Like: 61°
Brookings
Partly Cloudy
75° wxIcon
Hi: 85° Lo: 56°
Feels Like: 75°
Crater Lake
Clear
61° wxIcon
Hi: 69° Lo: 35°
Feels Like: 61°
Grants Pass
Clear
61° wxIcon
Hi: 91° Lo: 46°
Feels Like: 61°
Klamath Falls
Clear
59° wxIcon
Hi: 78° Lo: 41°
Feels Like: 59°
Warmer temperatures with haze returning
KDRV Radar
KDRV Fire Danger
KDRV Weather Cam

Community Events