New and emerging pharmaceutical drugs are revolutionizing how we treat serious health conditions. However, the soaring cost of both new and existing drugs continues to be a growing problem affecting Mainers and all Americans.
This is why Consumers for Affordable Health Care and Harvard Pilgrim Health Care are uniting in support of legislation to promote transparency around prescription-drug pricing. We don’t always come down on the same side of issues, but on this one we stand together with Mainers who want to understand why their prescription drugs cost so much.
High-priced, breakthrough drugs tend to grab the headlines, like Sovaldi, a hepatitis C treatment with an initial $1,000-per-pill price, but there are now many examples of drugs that have major impacts on the cost of health insurance as well as out-of-pocket costs for consumers. Consider the new gene therapy to treat some forms of cancer, called CAR T. It essentially engineers a patient’s immune cells to fight their disease and can cost well over $500,000 for a single treatment, when you include hospitalization and other treatment requirements.
Oddly, even common or older medications have seen dramatic price increases recently. For example, a tube of a generic topical ointment used to treat eczema and psoriasis that cost roughly $8 in 2013 increased to $180, a 2,200 percent increase in just three years. Another example is a product that is a combination of two over-the-counter products (Nexium and Aleve) and was priced at less than $100 per prescription in 2011. Today, the product is priced at over $2,200 per prescription.
Both consumers and insurers are left scrambling to cover the cost.
Today, there is no transparency around drug pricing methodologies in the United States. The pharmaceutical industry is not required to provide information on the actual cost of research and development, manufacturing or administrative overhead. It is not required to explain why these drugs cost far less in other countries than they do here in the United States.
While it is true that the industry offers rebates or discounts to health insurers like Harvard Pilgrim, calculating the real value of these discounts is impossible when there is no objective information on true starting costs. It’s like going to a department store with a 50 percent off sale: If you don’t know what the original price was, how do you know you are really saving 50 percent?
Legislation is pending before the Maine Legislature that takes a modest, common-sense approach to the issue. The measure, L.D. 1406, would require the state’s health care database, CompareMaine.org, to identify the prescription drugs that are considered high-cost and those that have increased significantly in price over time.
Next, the bill would require those drugmakers identified as having the greatest impact on health care costs in Maine to justify those price increases by disclosing how much they spent on research and development, marketing and advertising, and other pricing factors such as discount programs.
They would also be required to report how much of the research and development cost for the drug was paid for with taxpayer dollars, as well as how much the company charges for the same drug in other high-income, highly developed countries.
This legislation is not intended to hinder the great progress that the pharmaceutic and biomedical industry is making on new medicines to treat and cure disease. Rather, it is intended to shine a light on the pricing system and to demonstrate that Maine is a state that responds to the concerns of its citizens. In Maine, we have reporting requirements for health care providers and insurers – why not for pharmaceutical companies? We believe that Mainers deserve to know what is driving the higher cost of prescription drugs and that transparency is a first step in the right direction.
Recent Critical Insights polling shows that Maine voters care about this issue and that 88 percent want lawmakers to require more transparency from drug companies. Unfortunately, efforts by drug manufacturers to weaken the legislation have gained traction, and there are now two versions under consideration by the Legislature.
We are urging lawmakers to support the stronger version of L.D. 1406 and not pass something that further delays providing the information on high drug costs that Maine people want. Mainers who would like to see more transparency around drug prices should let their lawmakers know they want them to support the stronger version of L.D. 1406.
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