Since 2008, drug prices have been going through the roof: According to the American Association of Retired Persons (AARP), brand-name prescription drugs have doubled and retail prices for prescription medications commonly used by older adults have risen an average of 8.4% just last year. In addition, the cost of necessary prescription medicines for a chronic illness sufferer can average a whopping $13,000 per year. Medicare drug spending has also grown by approximately 9.5% every year over the last decade.
On the campaign trail for the 2016 presidential election, Trump claimed that he wanted to bring drug prices “back down to earth”; however, within the first 12 months of his administration, brand-name drug prices increased 8%, more than four times the rate of inflation and twice the rate of other healthcare-related hikes.
House Democrats Primed to Kick Off Drug Price Reduction Plans
With the aim of producing meaningful drug pricing reductions, experts predict that the new Democrat-led House Oversight Committee will take full advantage of its subpoena power and emphasize high-profile investigations and hearings. Ranking Member of the House Oversight and Government Reform Committee Elijah Cummings (D-MD) has already announced his intention to focus investigations on drug prices among other things.
Representative Frank Pallone Jr. (D-NJ), who is expected to be the next Chairman of a committee to oversee drug prices has stated that his main goals are to allow Medicare to negotiate drug prices with pharmaceutical companies as well as simplifying the process of approval for more affordable generic drugs. President Trump’s longstanding support for both of those policies suggests that there may finally be hope for a bipartisan deal to regulate drug prices.
The drug pricing reforms are predictably unpopular with the prescription drug industry’s lobbying group, the Pharmaceutical Research and Manufacturers of America (PhRMA). STAT News is particularly descriptive, writing that the Democrats’ proposed “agenda to combat high drug costs could turn 2019 into PhRMA’s doomsday scenario.”
Opportunities for bipartisanship?
The Democrats may receive a little extra help with the retirement of Senator Orrin Hatch (R-UT), a longtime ally and advocate of Big Pharma. Hatch has long been seen as an impediment to any serious efforts to reform drug pricing and a help to drug makers ever-increasing profits. Pharmaceutical companies are preparing themselves for a major threat in January when Hatch’s replacement, Senator Chuck Grassley (R-IA), takes up his new position as head of the Senate Finance Committee. Grassley, on the other hand, has historically taken a more antagonistic approach to Big Pharma and was instrumental in authoring the 2006 law for Medicare D prescription drug benefit.