Prescription Drug Prices: A Bitter Pill in the Midterm Elections

All the campaign rhetoric leading up to Election Day 2018 next Tuesday is enough to give you a headache. Maybe that’s one reason why high prescription drug prices have become a major concern among older voters for the midterm elections.

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“This is a pain point,” said Tim Lash, chief strategy officer of West Health Institute and president of West Health Policy Center. “We still have high prescription drug prices and we also have broken promises.”

Meanwhile, brand-name prescription drug prices have doubled between 2008 and 2016 and retail prices for many commonly-used brand name drugs by older adults soared an average of 8.4 percent in 2017, according to AARP. And AARP says the average retail price of a prescription drug for a chronic condition has reached $13,000 a year. Medicare drug spending — which accounts for 29 percent of the nation’s prescription drug spending — has grown by roughly 9.5 percent a year since 2009.

In a September survey by West Health Institute and NORC at the University of Chicago, 39 percent of voters 65 and older said prescription drug prices should be the single top priority for candidates. And 92 percent of registered likely voters over 50 surveyed by AARP said the candidates’ positions on lowering prescription drug costs are important to them.

Little wonder that the Patients for Affordable Drugs PAC has spent more than $8 million in midterm election campaign ads. Little wonder, too, that in recent months, and especially recent weeks, President Trump has promulgated proposals to help bring down prescription drug costs, albeit not going as far as he promised during the 2016 campaign.

In May, with great fanfare, the president announced his broad blueprint to lower prescription drug prices. At the time, he said drug companies would be announcing “massive” voluntary price cuts. During the summer, Pfizer and Novartis said they wouldn’t administer some planned price increases. But otherwise, according to a September AP article by Linda A. Johnson and Nicky Forster, “it’s been business as usual for drugmakers, with far more price hikes than cuts.”

Speaking about Trump, U.S. Health and Human Services Secretary Alex Azar told PBS NewsHour last week: “My boss wants action yesterday on drug prices.”

And if the Democrats take control of the House of Representatives on November 6, an article from the STAT health news website says, “the wing of [Democratic leader Nancy] Pelosi’s party outlining an ambitious agenda to combat high drug costs could turn 2019 into PhRMA’s doomsday scenario.” PhRMA is the Pharmaceutical Research and Manufacturers of America, the drug industry’s lobbying group.

Pelosi told STAT: “Democrats have made real action to lower prescription drug prices central” to the party’s campaign strategy, adding that this “will be one of our first legislative priorities in the majority.”

The Democrats may well get help from Senate Republicans to bring down drug prices, even if the Republicans retain control of the Senate. STAT notes the drug industry’s longtime ally Sen. Orrin Hatch, who’s retiring, would probably be replaced as chair of the Senate Finance Committee by Sen. Chuck Grassley of Iowa. Grassley’s a populist on drug pricing issues and one of the authors of the 2006 law creating Medicare’s Part D prescription drug benefit.

AARP has four questions it says older voters should ask midterm candidates about drug prices:

• Do you support letting Medicare negotiate with prescription drug companies?
• Would you vote for a bill that would get lower priced generic drugs to market quicker?
• Should Americans be allowed to buy safe, lower-priced drugs from other countries?
• Would you require drug manufacturers to explain large price increases?

The question about letting Medicare negotiate with prescription drug companies became nuanced last week, when President Trump unveiled his own Medicare drug-price proposal.

Saying that drug companies have “rigged the system” against American consumers by charging higher prices in the U.S. than they do abroad, Trump proposed creating an “international pricing index” as a benchmark to decide how much the government should pay for prescription drugs covered by Medicare’s Part B outpatient program.

Although Trump called the proposal “a revolutionary change," it wouldn’t affect prescription drugs bought from pharmacies. It would only apply to infused and injected drugs administered by physicians at doctor’s offices and in hospitals (some of the most expensive drugs older patients get), and only in half the country. It would take effect in late 2019 or 2020, if it comes to pass; the drug industry and some Republicans in Congress oppose it. The Trump administration says the proposal would lower co-insurance payments for Medicare beneficiaries.

David Mitchell, president of Patients for Affordable Drugs, told PBS NewsHour this idea is “a step in the right direction, but there’s a lot more to do. We believe strongly that we should be negotiating over drug prices, our government should.”

Most older voters feel that way, too.

In the West Health/NORC survey, more than 90 percent of Americans 65 and older favored letting Medicare directly negotiate with pharmaceutical companies, something it can’t do now. “We found in our survey wide public support by people of both parties in allowing Medicare to negotiate drug prices,” said Lash.

And 66 percent of registered likely voters over 50 surveyed by AARP said letting Medicare negotiate lower drug prices will “help put Medicare on stable financial ground and save seniors money on the medications they need to stay healthy.”

Lash said the government “has failed to apply any leverage against drug manufacturers, and the government is the single largest purchaser of drugs, through Medicare.”

President Trump recently did sign into law bipartisan legislation passed by Congress to eliminate what are known as pharmacy “gag clauses,” where pharmacists are forbidden from telling consumers they could get a less expensive medicine by buying it without using their health insurance.

The law kicked in immediately for private insurance and will take effect for Medicare Advantage and Medicare Part D plans in 2020; 25 states have enacted similar measures for their residents.

And the Trump administration also recently proposed increasing price transparency in prescription drug advertisements — a lack of price transparency, Lash said, is one of the key reasons for the high cost of prescription medications. Whether this proposal will come to fruition, given the likely pushback from the pharmaceutical industry, is an open question.

High prescription drug prices, like covering pre-existing conditions in health insurance policies, represent a prime example of an economic and political issue that hits people where they live.

“No one should have to decide between taking prescription drugs and paying rent or having access to food,” said Lash. “And we don’t have to if we advance policies to change the equation.”

Added Lash, speaking for many older voters: “Bolder action is necessary and anything less won’t be tolerated.”

Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More