Op Ed- Congressman Zeldin Lowering Cost Of Prescription Drugs
Monday, June 18, 2018 at 1:14PM

Lowering the Burdensome Cost of Needed Prescription Drugs

Part 1 of a 2 Part Op-ed by Congressman Lee Zeldin (R, NY-1)

The rising cost of prescription drugs has dealt a crushing blow to the wallets of everyday Americans and put a great strain on the government supported programs some of our country’s most vulnerable populations, our seniors, children, disabled and impoverished communities, rely on.

According to a report by Express Scripts, a prescription benefits company, between 2008 and 2015, name brand drug prices increased by 164%. These price spikes frequently make life-saving medications unaffordable. When it comes to driving down the cost of prescription drugs for those who need it most, we must consider every option.

This Congress, in an effort to keep pace with an ever-changing marketplace and ever-evolving scientific innovation, the FDA Reauthorization Act of 2017 (H.R. 2430) was passed into law to bring lower-cost generic drug alternatives and biosimilars to market faster by increasing competition and lowering drug costs. With an increase in authority and flexibility, this reauthorization streamlines the process for reviewing and approving new treatments and cures for patients, ultimately delivering new and innovative therapies, drugs and devices to patients more quickly.

Under current law, the federal government has the ability to negotiate the prices of the prescription drugs government purchases from manufacturers, but the negotiating authority is insufficient and outdated. Currently, the federal government has the ability to negotiate prices under Medicare, but even when the government can negotiate prices, it is hamstrung by overregulation that ensures it cannot push for the same prices charged throughout the rest of the world. 

Under Medicare Part D, before reimbursing doctors, Medicare adds 6% to the sales price reported by pharmaceutical companies, then forces patients to cover 20% of the total cost. The burden to negotiate for prices is disproportionately left to doctors, often small practitioners who lack the market power to bargain effectively. As a result, Medicare pays significantly more than European countries for the same drugs, passing costs along to taxpayers and patients alike. The drug companies receive a windfall from Medicare’s lack of negotiating ability, reporting profit margins more than double market averages and earning upwards of an additional $50 billion annually in revenue from overcharging consumers. 

So what else can government do to lower the price of prescription drug prices? With some reforms, Medicare Part D could provide the rough outlines of a solution. Within Medicare Part D, private non-profit and for-profit health insurance companies bid to provide prescription drug coverage for Medicare beneficiaries and separately negotiate prices with pharmaceutical companies. The incentive for Part D plan sponsors to negotiate lower prices comes from the fact that they can then reduce their premiums for Medicare beneficiaries and therefore attract more customers. Due to the fact the taxpayer subsidy depends on the bids submitted by plan sponsors, this competition benefits not only Medicare beneficiaries, but taxpayers overall. Medicare Part D should be reformed to provide plans increased flexibility to enhance negotiating power with drug manufacturers and drive down costs for beneficiaries.

Notably, the bid system within Medicare Part D could ensure that cheap and effective generic products reach consumers. By forcing companies to bid for Medicare’s business, the government could promote competition within the marketplace, driving down prices on name-brand products. While depression medication Welbutrin costs, on average, $6,000 per 100 pills, its generic counterpart, Bupropion, costs only $50-$60 for the same quantity. Though name-brand anxiety drug Adivan also costs, on average, $6,000 for 100 pills, an equal supply of Lorazepam costs only $2-$3. The shocking discrepancies in price continue across the board, from asthma medication to EpiPens to blood pressure drugs to cancer treatments. The recent price spike in a 2-pack of EpiPens from around $100 to over $600 epitomizes the monopoly power of the drug companies. The producer of EpiPens could overcharge customers at will, confident that few generic counterparts could compete. Similarly, the price of insulin to treat diabetes tripled within 10 years, the cost of asthma medication increased 6% and the price of Betaseron spiked from $8,000 per year to close to $60,000.

Americans who rely on EpiPens and other drugs in potentially life and death situations have been railroaded with a lifesaving medication at a price they cannot afford and we must work to drive down the increasingly burdensome cost they have been saddled with.

Congressman Lee Zeldin represents the First Congressional District of New York in Congress where he services on both the House Financial Services and Foreign Affairs Committees.

Article originally appeared on Smithtown Matters - Online Local News about Smithtown, Kings Park, St James, Nesconset, Commack, Hauppauge, Ft. Salonga (http://www.smithtownmatters.com/).
See website for complete article licensing information.