Today, the “Health Care Congress” continues to respond to the will of the voters with a House Ways & Means hearing on the Cost of Rising Prescription Drug Prices. While President Trump repeatedly promises to lower the cost of prescription drugs, Republicans are protecting the rigged system for the drug companies, allowing insurance companies to deny drug coverage to people, and rewarding the drug companies, instead.
Republicans and the Trump administration did do one thing on this issue: America’s largest pharmaceutical companies got a huge huge tax break from the Trump Tax bill and are lining the pockets of shareholders and CEOs while continuing to raise prices for everyday Americans.
The Trump Administration’s Talk is Cheap, But Drug Prices Aren’t…
Health care is prohibitively expensive for many Americans, causing many who have insurance to skip or delay care and prohibiting many who lack insurance from signing up for care.
- A Protect Our Care poll found that 84 percent of Americans support requiring drug companies to notify the government in advance when they plan to significantly raise drug prices and create a mechanism to identify and stop unjustified increases; 82 percent support allowing Medicare to negotiate directly with drug companies to get lower prices on prescription drugs.
- 15.5 percent of those who have insurance either skipped or delayed care because of cost or trouble paying bills in 2017.
- Roughly one in four, or 26.2 percent of non-elderly people struggle with insurance affordability problems.
- Cost is of particular concern to those in fair or poor health — 46.5 percent of those in fair or poor health are uninsured or have problems affording care despite having coverage. This includes 13.5 percent who are uninsured and 32.9 percent who have insurance but had a problem affording care in the last year.
- Cost is the most cited reason for being uninsured — 45 percent of uninsured nonelderly adults in 2017 said they were uninsured because the cost is too high.
Americans pay more for drugs than do people in any other country. At $1,208 per capita, people in the U.S. spend more on pharmaceuticals per capita than do people in any other country in the world. British researchers found that U.S. prices were consistently higher than in other European markets, six times higher than in Brazil, and 16 times higher than in the lowest-price country, which was usually India.
Drug Prices Continue to Soar Under Trump. A report by Senate Democrats finds that the prices of the 20 most-prescribed drugs under Medicare Part D have increased substantially over the past five years, rising 10 times faster than inflation. Another report from the Pharmacy Benefits Consultants finds that over the past 14 months, 20 prescription drugs saw list-price increases of more than 200 percent.
Drug companies are engaging in the dangerous practice of price-gouging — pursuing massive profits to the detriment of people who need their medication to survive. In September 2018, Nostrum chief executive Nirmal Mulye defended his choice to raise the price of an antibiotic from $474.75 to $2,392 a bottle, saying he had “moral requirement…to sell the product for the highest price.” In 2017, Mylan, the company that made the EpiPen, came under fire for charging $609 for a box of two devices even though each only contained about $1 worth of the drug epinephrine. Between 2012 and 2016, the price of insulin, which 7.5 million Americans depend on, nearly doubled from $344 to $666.
…Pharmaceutical Companies Are Raking It In…
Pharmaceutical Companies Have Reaped Huge Benefits From The Trump Tax Bill. The Trump tax scam means billions of dollars in tax breaks for pharmaceutical companies. An Axios study found that 21 health care companies collectively expect to gain $10 billion in tax savings during 2018 alone. Most of the tax break windfall for health care companies is going toward share buybacks, dividends, acquisitions and paying down debt. According to Axios, nine pharmaceutical companies are are spending a combined $50 billion on new share buyback programs. All of the buybacks were announced during or after passage of the tax bill. Some drug companies are also increasing dividends for shareholders, with AbbVie increasing its cash dividend by 35 percent while also announcing a new $10 billion share repurchase program.
Massive Profits And Price Increases. Pharmaceutical companies raked in more than $30 billion in profits in the third quarter of 2018, with Pfizer alone bringing in $4.1 billion — the highest of any publicly traded health care company. Of the 19 companies that tallied at least $1 billion of third-quarter profit, 14 were drug companies. Meanwhile, pharmaceutical companies continue to increase prices. In January 2019 alone, Pfizer and Novartis announced price increases on dozens of drugs, including increasing the cost of a breast cancer medication to $12,000 for 21 pills. All in all, nearly 30 drugmakers are expected to raise prices in 2019.
Soaring CEO Pay. According to an Axios study, the CEOs of 70 of the largest U.S. health care companies cumulatively have earned $9.8 billion since 2010. CEOs took home nearly 11 percent more money on average every year since 2010 — far more than the wage growth of nearly all other workers. In 2017 alone, 30 health care executives made a combined $976 million.
…And Republicans Are Making it Worse
Republicans refuse to let Medicare negotiate for lower drug prices. Though 92 percent of Americans support allowing the federal government to negotiate drug prices for Medicare beneficiaries, Republicans refuse to let Medicare negotiate drug prices. A 2018 Senate Homeland Security and Governmental Affairs Democratic Committee report found that Medicare Part D could save $2.8 billion in a single year if it were allowed to negotiate drug prices.
Trump Installed Big Pharma Executives In Key Administration Posts. President Trump installed a former Eli Lily executive, Alex Azar, as his secretary of Health and Human Services and his appointment of Scott Gottlieb at FDA was described as “music to pharma’s ears.” Other pharma lobbyists writing Trump’s health policy include senior adviser at FDA, Keagan Lenihan, who joined the administration after lobbying for the drug distribution giant McKesson, former Gilead lobbyist, Joe Grogan, who reviews health care regulations at the Office of Management and Budget, and Deputy Assistant to the President for Domestic Policy Lance Leggitt, who has lobbied for a variety of drug-industry clients.
Trump’s Proposals Always Fall Far Short Of His Promises. President Trump promised that he would allow Medicare to use its buying power to negotiate drug prices directly with suppliers, but after meeting with pharmaceutical executives early in 2017, Trump abandoned that pledge, calling it “price fixing” that would hurt “smaller, younger companies.” The planned announcement to move some drugs from Medicare Part B, in which pharmaceuticals are purchased and administered by medical providers, to Part D, will do little to restrain the cost of prescription drugs for America’s seniors and falls far short of Trump’s promises.
Because Washington Republicans Repealed The Requirement That Most People Have Insurance And Encouraged People To Sign Up For Junk Plans, 2019 Premiums Are Higher Than They Should Be. Charles Gaba, health care analyst, calculates that individual marketplace premiums are increasing by an average of 2.8 percent nationally. However, Gaba estimates that if not for Republican sabotage, premiums would decrease by an average of 5.4 percent.
The Administration Has Consistently Advocated For The Repeal Of The Affordable Care Act, Including Eliminating The Requirement That Insurance Companies Cover Prescription Drugs. After the Trump administration tried and failed to repeal the ACA legislatively, it took to the courts in hopes of eliminating the health law. In 2018, the Justice Department decided not to defend the Affordable Care Act in court against a lawsuit seeking to overturn it. Since, a federal judge has ruled to overturn the law, including its requirement that insurance companies cover patients’ prescription drugs.
