Attacking Rising Prescription Drug Costs

Published in the Woonsocket Call on April 7, 2019

The Washington, DC-based AARP timed the release of its latest Rx Price Watch report as the House Energy Commerce Committee marked up and passed a dozen bills just days ago, six that would lower prescription drug costs. The legislative proposals now go to the House floor for consideration.

AARP’s new report, a continuation of a series that has been tracking price changes for widely used prescription drugs since 2004, was circulated to House Committee members before their markup and vote and its findings sent a message to the lawmakers that they hear from their older constituents, that is the costs of pharmaceutical drugs is skyrocketing, making it difficult to fill needed prescriptions.

Poll after poll findings reflect the concerns of seniors about their ability to pay for prescribed medications. According to a Kaiser Family Foundation poll released last month, 79 percent of survey respondents view drug prices to be “unreasonable,” while just 17 percent found the costs to be “reasonable.” Twenty-four percent of these respondents found it difficult to pay the costs of their prescription drugs.

Generic Drugs Can Save Dollars

According to the new AARP Public Policy Institute (PPI) report, by Leigh Purvis and Dr. Stephen W. Schondelmeyer, the average annual cost of therapy for one widely used brand-name prescription drug in 2017 was over 18 times higher than the cost of therapy for one generic drug. The cost for a generic medication used on a chronic basis averaged $365 per year. In contrast, the average annual cost for a brand-name prescription drug was $6,798. But, four years earlier the price differential between these same market baskets was substantially smaller ($4,308 verses $751 respectively).

“Generics account for nearly nine out of every 10 prescriptions filled in the U.S. but represent less than a quarter of the country’s drug spending,” said Debra Whitman, Executive Vice President and Chief Public Policy Officer at AARP, in a statement released with the PPI’s 28 page report “These results highlight the importance of eliminating anticompetitive behavior by brand-name drug companies so that we get more lower-priced generic drugs on the market,” says Whitman.

AARP’s PPI report, entitled “Trends in Retail Prices of Generic Prescription Drugs Widely Used by Older Americans,” found that retail prices for 390 generic prescription drugs commonly used by older adults, including Medicare beneficiaries, decreased by an average of 9.3 percent in 2017, compared to the general inflation rate of 2.1 percent. The decline follows two consecutive years of substantial generic drug price decreases; the previous two consecutive years saw increases in generic drug prices. All but three of the 390 generic prescription drugs analyzed in AARP’s report had a retail price change in 2017. While prices for 297 (76 percent) drug products decreased, 90 (23 percent) products had price increases.
Six commonly used generic drug products had retail price increases of greater than 70 percent, including a nearly 200 percent increase for sertraline HCL, an antidepressant, finds the AARP.

AARP’s PPI report found that with older adults taking an average of 4.5 prescription drugs every month, those using generic prescription drugs were likely to have an average annual retail cost of $1,642 in 2017.

“The gap between average annual brand-name and generic drug prices has increased dramatically—brand name drug prices were six times higher than generic drug prices in 2013 but more than 18 times higher in 2017,” said Leigh Purvis, Director of Health Services Research, AARP Policy Institute, and co-author of the report. “As long as brand name drug prices continue to skyrocket, the value of prohibiting brand name drug company practices that slow or prevent competition from generic and biosimilar drugs cannot be overstated.”

AARP Pushes for Passage of Bills to Lower Drug Costs

Before the Committee on Energy and Commerce vote on April 3, in correspondence AARP urged Chairman Frank Pallone, Jr. (D-N.J.) and Ranking Member Greg Walden (R-Ore) to enact two bills (along with four other proposals) being considered at the morning markup session. These legislative proposals would lower prescription drug costs and had previously been approved by the Energy and Commerce Health Subcommittee.

In the correspondence, AARP’s Nancy A. LeaMond, Executive Vice President and Chief Advocacy and Engagement Officer, pushed for passage of H.R., 1499. the “Protecting Consumer Access to Generic Drugs Act of 2019.” introduced by Rep. Bobby Rush (D-IL). This proposal would make it illegal for brand-name and generic drug manufacturers to enter into agreements in which the brand-name drug manufacturer pays the generic manufacturer to keep a generic equivalent off the market. The bill was passed by voice vote.

LeaMond also supported H.R., 965, the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2019,” introduced by Reps. David Cicilline (D-RI), Jim Sensenbrenner (R-WI), Jerrold Nadler (D-NY), Doug Collins (R-GA), Peter Welch (D-VT), and David McKinley (R-WV). The proposal would establish a process by which generic manufacturers could obtain sufficient quantities of brand drug samples for testing thereby deterring gaming of safety protocols that brand manufacturers use to delay or impede generic entry. The bill passed by a bipartisan vote of 51-0.

At the markup, Pallone and Walden were able to work out philosophical differences on H.R. 1499 and H.R. 965. The two lawmakers also hammered out a compromise on H.R. 1503, the “Organize Book Transparency Act of 2019,” that would ensure that the Orange book, which identifies drug products approved on the basis of safety and effectiveness by the Food and Drug Administration, is accurate and up-to-date.

Washington Insiders say that Democratic control of the House will ensure the passage of these legislative proposals on the House floor and the bipartisan vote on the CREATES Act in the lower chamber creates an opportunity for Senate Finance Committee Chairman Chuck Grassley (R-Iowa) to successfully push his CREATES Act companion measure in the Senate.

Grassley says the broad, bipartisan action by the House Energy and Commerce Committee to advance the CREATES Act is a major win for consumers. “I look forward to advancing this bill because it will cut down on abuses in the system that keep prices high for patients. I’m also pleased that the committee advanced a bill to address pay-for-delay schemes. Although that bill is not identical to the bill I’ve sponsored in the Senate, the bill’s movement shows that the committee is serious about addressing the pay-for-delay problem,” says the Senator.

As They See It…

AARP’s LeaMond, says “Brand-name drug companies want to stifle generic competition to protect their monopolies and profits. AARP believes that eliminating these deliberate anticompetitive behaviors will result in a more robust generic drug market and greater savings for both patients and taxpayers. The Congressional Budget Office estimated that legislation such as the CREATES Act could save taxpayers more than $3 billion over a decade, and the Federal Trade Commission estimated pay-for-delay deals cost consumers and taxpayers $3.5 billion a year.

“We have long supported the CREATES Act and banning pay-for-delay agreements, and are heartened that Congress is acting to improve access to generic drugs. These bills will promote competition driving down costs for seniors,” says Lisa Swirsky, Senior Policy Analyst, at the National Committee to Preserve Social Security and Medicare.

“Congressman Cicilline has been a leader in our caucus for putting prescription drug prices at the front of our agenda. Moving generics to market faster is an important step to lower prescription drug costs for every American,” said House Speaker Nancy Pelosi. “House Democrats have made it a top priority to lower Americans’ health costs by reducing the price of prescription drugs, and these bipartisan bills show we mean to deliver,” she says.

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Bush Flip Flops on Politically Charged Medicare Statement

Published in Woonsocket Call on August 16, 2015

On July 30, aging advocates celebrated the fiftieth birthday of Medicare, the nation’s second largest social insurance program in the United States. This program provides health care to more than 53.8 million beneficiaries, with total expenditures of $613 billion in 2014.  Three weeks earlier one GOP Presidential candidate was not calling for the celebration of this golden anniversary, but for the dismantling of it.

On Wednesday, July 22, at a New Hampshire town hall meeting, GOP Presidential candidate Jeb Bush suggested that its time to “phase out” Medicare.  This event was sponsored by Americans for prosperity, a conservative group financially backed by the extremely right-wing Koch Brothers, who oppose President Obama’s Affordable Care Act, the expansion of Medicare, minimum wage and anything else endorsed by Democrats and Progressives. . .

Bush Gets Cozy with Koch Brothers

At the town hall meeting, the former Florida Republican Governor called on the left to “join the conversation” of reforming Medicare.  “But they haven’t,” he charges.

GOP Presidential candidate Bush reminded the attending conservatives that over a year ago Rep. Paul Ryan (R-WI) offered his proposal in the 2015 Budget plan to replace the health program with vouchers and to increase the age eligibility from 65 to 67.  After this, television ads began to appear with a Ryan look-alike pushing a senior off a cliff in a wheelchair, he said, quipping “That’s their [liberals] response.”

Bush went on to say, “And I think we need to be vigilant about this and persuade people that our, when your volunteers go door to door, and they talk to people, people understand this. They know, and I think a lot of people recognize that we need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits. But that we need to figure out a way to phase out this program for others and move to a new system that allows them to have something – because they’re not going to have anything.”

The Democratic National Committee (DNC) quickly seized Bush’s politically charged talking points, posting his comments at Americans for Prosperity event on YouTube.  The DNC jumped on the opportunity to send a message out to older Americans and liberal groups that the Florida Republican opposes a very popular domestic program.

One day later, on August 23, Bush worked hard to dodge intense political flack generated by his call for seriously “phasing out Medicare.” He explained that the Democrats and media took his previous comments out of context, he was only trying to reform Medicare to save it.

Medicare is an “actuarially unsound health system,” says Bush, who called for something to be done before skyrocketing costs burden future generations with $50 billion dollars of debt.

Keep the Status Quo

Bush’s campaigning in New Hampshire has revealed what many seasoned Republicans lawmakers know, there can be a swift political backlash to tinkering with the widely popular Medicare program.  A newly released national poll bluntly supports what AARP and other national aging advocacy groups and Democrats clearly know, the American public is quite happy with their Medicare program.

According to “Medicare and Medicaid at 50,” a new Kaiser Family Foundation poll released on last month, a majority of Americans and the vast majority of program beneficiaries view both Medicare positively.   Simply put, respondents had a strong preference for the status quo over major structural changes that would reshape how the programs serve beneficiaries, say researchers in their 27 page report.

The survey finds that a strong majority (70%) say that Medicare should continue to ensure all seniors get the same defined set of benefits. Far fewer (26%) say that the program should be changed to instead guarantee each senior a fixed contribution to the cost of their health insurance – a system known as premium support that has been proposed to address Medicare’s long-term financing challenges.

By a whopping two-to-one margin, majorities of Democrats, Republicans and independents favor keeping Medicare as is rather than changing to a premium support program. Adults under 65 years old are somewhat more likely than seniors to favor premium support (28% compared to 18%), though large majorities in all age groups prefer Medicare’s current structure.

But, despite the public’s lack of support for this change, the survey says that majority (54%) worry that Medicare will not be able to provide the same level of benefits to future enrollees, and two thirds (68%) say that changes are needed to keep Medicare sustainable for the future.

Improved Outlook for Medicare

While Bush, his fellow Republican Presidential Candidates and Republican Congressional Leadership say that Medicare costs are bankrupting the nation, a recently released Medicare Trustee’s 2015 Annual Report states the opposite.  This program will remain solvent until 2030, unchanged from last years analysis, but with an improved long-term outlook from the 2014 report, says the report released in July.   Under this year’s projection, the trust fund will remain solvent 13 years longer than the Trustees projections in 2009, before the passage of the Affordable Care Act.

“Growth in per-Medicare enrollee costs continues to be historically low even as the economy continues to rebound. While this is good news, we cannot be complacent as the number of Medicare beneficiaries continues to grow,” said Andy Slavitt, Acting Administrator of the Centers for Medicare & Medicaid Services (CMS). “That’s why we must continue to transform our health care system into one that delivers better care and spends our dollars in a smarter way for beneficiaries so Medicare can continue to meet the needs of our beneficiaries for the next 50 years and beyond,” he adds.

The Medicare Trustee’s 2015 Annual Report also noted that per-enrollee Medicare spending growth has been low, averaging 1.3 percent over the last five years. In 2014, Medicare expenditures were slightly lower for Part A and Part D, and higher for Part B than previously estimated. Over the next decade, and partially due to the cost-containment provisions in the Affordable Care Act, per-enrollee Medicare spending growth (4.2 percent) is expected to continue to be lower than the overall growth in overall health expenditures (5.1 percent).

Over the years, Republican Congressional Lawmaker efforts have been largely unsuccessful in changing a very popular Medicare program.  As Bush found out during his politicking in the granite state, touching Medicare can have instant negative political consequences.

Once the GOP whittles down its 16 presidential candidates to a chosen standard-bearer to push its conservative agenda in the upcoming 2016 Presidential elections, the party must reexamine its position of scrapping the existing Medicare program.  Recognizing future challenges in the nation’s health care system, AARP throws commonsense ideas into the national debate as to what is the best way of strengthening Medicare.  The Washington, D.C. aging advocacy group calls for lowering prescription costs, improving health care coordination, and cracking down on over-testing, waste and fraud.

As AARP suggests, simple fixes can lower costs, but it also continues health coverage to the program’s current and future beneficiaries.  That’s the way to reform a widely popular domestic program.  By small incremental steps.