For folks like me who take a roster of pills every day, the high price of prescriptions is a matter of life and death, or at least so you feel good enough to make it on your feet 12 hours a day.
You can’t put a price on that, and the drug companies know it. Some Colorado lawmakers think Americans should know exactly what you’re paying for and why. That’s the biggest political argument in the halls of Congress, and it’s no different at the state Capitol in Denver.
“High drug prices are financially toxic for American workers,” Vanderbilt University School of Medicine health policy expert Stacie Dusetzina, co-author of a report on drug costs by the National Academies of Sciences, Engineering and Medicine, told Consumer Reports last year.
Colorado has a $32 billion annual budget for everything from teachers salaries to prison ketchup, but more than $1 billion a year goes to prescriptions for Medicaid and other safety net programs. The state estimates that drugs account for about 15% of the cost of a health insurance policy.
Gov. Jared Polis knows that. His administration is focused on drug prices as the underpinning of his evidently very serious promise to cut the cost of health care in Colorado.
The Office of Saving People Money on Health Care, created by Polis and led by Lt. Gov. Dianne Primavera, released a must-read report in December on “Reducing Prescription Drug Costs in Colorado” with the telling subtitle, “Cost Drivers and Strategies to Address Them.”
The Polis folks cite “inadequate price controls” on prescription drugs and indefensible blocks on public programs, such as Medicare, using volume sales to negotiate price.
The report points to a system that secretly pays middlemen at the expense of consumers, plus willy-nilly pricing for the same drugs that suggest prices are based on what the market will bear, not a commitment to healing.
Several bills in the General Assembly this year take on the issue, and some are likely to pass with strong Democratic sponsors pitching to Democratic chambers, with Polis eager to help.
One, is the Colorado Prescription Drug Price Transparency Act, House Bill 1160, sponsored by Reps. Dominique Jackson of Denver and Dylan Roberts of Avon. Among its provisions, drugmakers would have to explain why they hike the price of common drugs by 10% or more.
The bill also would allow the state to see the price of drugs without rebates that obscure the true cost to consumers, why prices vary so much from place to place, including compared to prices charged in other countries.
Drugmakers’ reps told the House Health and Insurance Committee on Feb. 12 there could be unintended consequences involving trade secrets.
“It’s not just like the Coke recipe,” replied Rep. Kerry Tipper, a Democrat from Lakewood who sits on the committee. “It’s that Rep. (Janet) Buckner is being charged $50 for that Coke, and I’m being charged $65, and a week from now I get a bill and it’s $72, and our friends and neighbors in Ireland are paying $3 for that Coke.
“And the reason Coke is so expensive in the United States is because of the recipe, but you can’t have access to the recipe because it’s a trade secret. That’s what spins our constituents and legislators and policy people in circles.”
Like so many things these days, U.S. Sen. Cory Gardner is caught in the middle.
The endangered Colorado Republican has made prescription cost reduction a priority. Gardner even introduced an aggressive bill, the Prescription Drug Reporting Act, to address a big part of the problem. Like Polis, he sees cutting out drug-pricing middlemen as key to passing savings on to sick folks.
U.S. House Democrats passed a sweeping drug-pricing bill in December, but Senate Majority Leader Mitch McConnell effectively put it in a bottle and threw it in the Potomac.
Republican Sen. Chuck Grassley of Iowa and Democratic Sen. Ron Wyden of Oregon have a competing Drug Pricing Reduction Act to limit price increases in Medicare’s prescription drug benefit to the rate of inflation or force companies to pay rebates to consumers. The bill caps seniors’ out-of-pocket drug costs at $3,100 a year.
President Donald Trump likes the bill. Colorado’s other U.S. senator, Michael Bennet, also likes it. McConnell doesn’t.
As good as that sounds in a stump speech, it doesn’t go nearly far enough to lower prices for the rest of us, yielding an indirect benefit, at best. Moreover, the GOP’s most conservative Republicans liken it to price controls, which is conservative anathema, or at least it was until Trump ruled it OK.
If Gardner signs on with the Grassley-Wyden bill, he could be on a winning team, which he needs, but it could come with a cost to his reputation among hardcore conservatives in a grab for the middle.
You might have seen the ads that started this month in Colorado and other politically notable states by the Campaign for Sustainable Rx Pricing to remind vulnerable lawmakers such as Gardner about their promises to work together to bring down drug prices, which so far are unkept.
“There are a few things we know about the rising prices of prescription drugs,” Jackson told the House committee considering her bill, “and one of them is we don’t know nearly enough.”