On the issue of out-of-control drug pricing, the federal government has been all talk and virtually no action. In an interview published this week on STAT News, former California congressman Henry Waxman – currently chairman of the lobbying firm Waxman Strategies, which works on health care policy – said, “There’s a strong interest by the public and by members of the House and the Senate to do something about high drug prices.”
He went on to say that even Trump has “made this a high priority,” but then adds, “There’s no easy solution to the problem.” Meanwhile, as the federal government continues to spin its wheels on the issue and make excuses, states are moving forward to hold Big Pharma accountable and bring transparency to drug pricing. This week, the state of Oregon joined the battle to rein in the prices drug companies are charging for prescription drugs as Governor Kate Brown signed HB 4005 into law.
The bill, which was the result of efforts by the organization Oregonians for Affordable Drug Prices Now, requires pharmaceutical companies to submit reports on R&D and marketing costs and profit margins for any drugs for which prices are raised in excess of 10%. In addition, they will be required to report on the availability of generic alternatives as well as pricing of the same drugs abroad. Drugmakers will be required to file their first reports in July of 2019.
Another part of the new law requires the state Department of Consumer and Business Services to publish data on excessive price increases and stipulates that insurance companies provide information on the effects of inflated drug prices on premiums.
Oregon is the latest state to pass legislation holding drug companies accountable for their pricing policies. To date, similar laws have been enacted in California, Maryland, and Nevada. Currently, there are 78 similar bills under consideration in state capitols across the country.
Not surprisingly, the industry is pushing back. Last year, PhRMA, the industry’s largest lobbying organization, increased its spending by 30%. In the wake of Governor Brown’s action, James Greenwood, CEO of the trade organization Biotechnology Innovation Organization (BIO), whined, “[This law] will have a chilling effect on an innovative industry and do nothing to empower patients or lower their prescription drug costs.”
Indeed? Last year, drug manufacturer Gilead Sciences said they must maintain high drug prices in order to cover their costs of “innovation” – yet in 2016, the company spent all of its profits on stock repurchases and shareholder dividends. It should also be pointed out that Gilead itself does very little in the way of “innovation” – instead, it buys up companies that have developed new medications and markets them (after raising the prices to obscene levels, of course).
The fact is that the federal government is far too beholden to the financial interests of the pharmaceutical industry. Despite all its talk, it will not lift a finger to address the problem of corporate greed and avarice. It has fallen to the states to take on the task of holding Big Pharma accountable – and with as many as fifty different legislatures to deal with, PhRMA and BIO will have their hands full fending off these justified attacks on their price gouging.