During an election year when voters and candidates from both parties registered outrage at high drug prices, the pharmaceutical industry’s most powerful trade group boosted revenues by nearly 25 percent, paying out millions to lobbyists and politicians, according to an NPR report broadcast this week.
Pharmaceutical Research and Manufacturers of America, known as PhRMA, raised $271 million in 2016, a $50 million increase over 2015, according to IRS filings. The group gave millions to presidential, congressional and state candidates and spent $57 million on lobbying efforts, a two-thirds increase over 2015.
“Does that surprise you?” former PhRMA CEO Billy Tauzin told NPR. When government responds to voters’ cry for lower drug prices, Tauzin stated, “PhRMA has always responded by increasing its resources.”
Lowering drug prices is long overdue, but this report shows what patients are up against. Right now, spending on prescription drugs rises at a rate faster than any other health care cost. Growing numbers of Americans can’t afford their medications, forcing too many to skip them altogether.
Alex Azar, President Donald Trump’s pick for health and human services secretary, told a Senate Committee last month that bringing drug prices down would be his top priority, confirming this is the president’s priority as well. Encouraging words, but choosing Azar as a change agent is ironic.
Consider insulin, critical to more than 6 million Americans with Type 1 diabetes. Between 2002 and 2013, drug makers Sanofi, Novo Nordisk and Eli Lilly (under Azar’s leadership) raised prices in lockstep. Their insulin more than tripled in price to as much as $300 per patient, per month. Closed-door negotiations between drug makers, insurance companies and middlemen pharmacy benefit managers, which came to light earlier this year, contributed to these outsize price increases.
When list prices rise, many with health insurance still see their out-of-pocket costs go up. Increasingly high patient co-payments, which require them to pay a portion of their drug costs, are based on whether the drugs are generic, preferred branded, other branded or specialty. The result: costs of some commonly prescribed drugs have become unaffordable for many patients.
Even prices for unproven medications or those with dubious benefit have skyrocketed. A study conducted before Food and Drug Administration approval recommended that necitumumab, a lung-cancer drug, ought to cost between $500 and $1,300 per treatment. Study authors based cost projection on the drug’s likely benefit: giving patients only a few weeks of quality life. Now approved, necitumumab commands a hefty $11,450 per treatment cycle.
In JAMA’s November editorial, the authors examine how the price to Medicare of Acthar gel – a little-known drug prescribed to treat everything from infantile spasms to the effects of Multiple Sclerosis – increased from $1,650 to more than $24,000 per 5 milliliter vial overnight, once the drug was acquired by Questcor. Now $34,034 for the same amount, Acthar cost a staggering $1.3 billion in Medicare payouts between 2011 and 2015. The authors urge reappraisal of the FDA approval process, as well as Medicare and private insurance standards.
A major problem is that – unlike in most industrialized countries – the U.S. government has no ability to negotiate drug prices with pharmaceutical companies. The FDA is tasked with approving medicines based on safety and efficacy, but cannot consider cost or value in its approval process. Medicare – which insures Americans 65 and older, the group with the most prescription medications per individual – was forbidden to negotiate prices starting in 2003 as part of government’s compromise with the pharmaceutical industry to get the Medicare drug expansion plan passed. That essentially leaves consumers unprotected, giving big pharma patent monopolies on drugs critical to patients’ lives and health, allowing them to charge whatever they want to Medicare.