Reducing Prescription Drug Costs
It is unacceptable that the United States pays, by far, the highest prices in the world for prescription drugs and that too many Americans between the ages of 18 and 64 cannot afford to fill their prescriptions. A lifesaving drug is no good if it is unaffordable to the very people who need it most. And many drug companies are spending more on advertising than on research. The largest pharmaceutical companies are making billions of dollars per year in profits at higher margins compared to other industries while many stash their profits in offshore tax havens.
Meanwhile, they charge Americans thousands of dollars for new drugs—often at much higher costs than in other developed nations. Democrats are committed to investing in the research, development, and innovation that creates lifesaving drugs and lowers overall health costs, but the profiteering of pharmaceutical companies is simply unacceptable.
We will crack down on price gouging by drug companies and cap the amount Americans have to pay out-of-pocket every month on prescription drugs. We will prohibit anti-competitive “pay for delay” deals that keep generic drugs off the market, and we will allow individuals, pharmacists, and wholesalers to import prescription drugs from licensed pharmacies in Canada and other countries with appropriate safety protections. Democrats will also fight to make sure that Medicare will negotiate lower prices with drug manufacturers.
It’s true that Americans pay more for prescription drugs than in many other countries. It’s true that drug companies try various ways to extend patent protection on a drug. It’s true that many drug companies have hefty profit margins. It is true that many drug companies spend more on promotional advertising than on research and development.
It is also true that Americans are subsidizing the rest of the world to some extent because other countries cap prices. It’s true that the FDA approval process is long and complicated, perhaps too complicated.
It is also true that in many cases, the cost benefit between a medication and treating the illness is in favor of even a very expensive drug.
Labeling drug profits as profiteering is inappropriate (look up the definition). Keep in mind that you can make a lot of money by selling a lot of stuff or selling less stuff at a higher profit margin. In practice the profit margin on many generic drug is higher than on a brand drug. Hey, movie concession stands have an 85% profit margin and people happily pay for that giant bucket of popcorn.
In many cases, the publicity surrounding the cost of a drug is very misleading because it refers to the sticker price, a price virtually no one pays. Drugs are heavily discounted to health plans, including Medicare and to employer self-funded plans through their pharmacy benefit managers. The idea of having Medicare negotiate drug prices is not as great as it sounds because the prices paid by the Part D plans are already negotiated.
Capping what the patient pays out-of-pocket sounds great, but that as usual is not the fundamental problem. How the patient uses, doesn’t use, misuses or abuses prescription drugs has something to do with all this too.
So where are we?
Politicians throwing stones and scapegoating drug companies is not the answer. Proposing what appear to be simple solutions is not helpful. We need to look at the whole process from start to finish, we need to consider the interests of all stakeholders. We need to solve the problem through an organized process. I know, good luck with that approach.