Fort Report: Fair Prices, Better Cures

Dec 6, 2019

I went to the doctor the other day.  He prescribed me an antibiotic.  It's a common treatment for a particular ailment used throughout the world.  I said, “I have to know the cost before we go further.”  He said, “It's minimal.  Six dollars.”  Turns out, it was six dollars.  In 2011.  Now, it’s $420.

This unfair dynamic is not unique to me.  Many other persons are being hit by the sky-high price of drugs.  In one case of those suffering from type 1 diabetes, the costs can be life-threatening, forcing some to ration medicine and others to pay for drugs rather than electric bills.

Big pharmaceutical companies and middle management responding to bad government policy have created the huge mess in this health care space.  The average annual cost of a brand-name drug has more than tripled in the past decade.  Families with diabetic children, seniors on Medicare, and others facing prohibitively high expenses for lifesaving drugs deserve better.

One obvious solution is to accelerate generic drug approval.  Drug companies, however, have a long history of slow walking the generic approval process through legal maneuvers, anti-competitive practices, and patent extensions.  I help lead the House Appropriations Subcommittee on Agriculture, Rural Development, and Food and Drug Administration (FDA).  Through our focused efforts, the FDA is reforming the generic approval process.

Cracking down harder on pharmaceutical companies who are exploiting loopholes to modify patents for not-so-unique drugs will also grow the generics market.  Currently, even a small modification in a drug can be enough to get it approved by the Patent and Trademark Office.  A 2018 analysis found that patent protection for 70% of the 100 best-selling drugs was extended at least once.  This is a significant cost driver.

According to the FDA, when generic competition exists, prices are often 80-85 percent less than brand-name drugs.  With 90 percent of generic prescriptions available for less than $20 for patients with insurance, that translates into real savings for families and healthier lives for all Americans.  The Government Accounting Office says that generics can save the U.S. health care system well over one trillion dollars a decade.

Another important piece of legislation allows pharmacists to tell patients about therapeutically equivalent, but less costly, drugs as well as alternative methods of purchasing drugs that are less expensive.  For a small number of lifesaving but rarely used “orphaned” drugs, we also need to prevent single corporations from exploiting a small market niche of desperate patients in a life-or-death struggle.

To further get at the root of prescription drug cost drivers, we need to change how we procure drugs in large public programs.  The United States federal government, through Medicare, Medicaid, Tricare, and other programs, is the largest purchaser of prescription drugs in the world.  The Department of Health and Human Services, however, is prohibited by law from negotiating what it pays with manufacturers (but not the Veterans Administration, by the way).  There is broad bipartisan agreement in Congress, and from the White House, that this policy needs to change.

A prescription drug should do two things—–cure disease, at a fair price.  In the coming weeks, there will be several large bills debated.  Unfortunately, in this political environment, one will be a Democrat bill, the other Republican.  No consensus exists.  After the smoke clears, I hope reasonable people will make way for the right solutions, not political anger.  The system is sick.  You deserve better cures at fairer prices.