“Pharmaceutical manufacturers continue to extend monopoly protection of brand and biologic prices, delay or prevent competition, and continue unsustainable price growth.”
Commonwealth Fund, January 2020
To his credit, President Joe Biden has taken unilateral action to curb drug price increases. In his new executive order, he instructs the FDA to help tribal governments and states to import drugs from Canada. The agency has been dragging its feet on implementing a Donald Trump policy to do so, causing a situation where only one state (Florida) has even applied to import drugs.
Congress, despite decades of talk, has yet to do anything significant on the topic. One can assume that this is because of the tremendous lobbying dollars spent by the industry with money going to both parties.
Credit: contributed
Credit: contributed
A February 2020 Gallup poll found that 66% of all Americans (and even 47% of Republicans) are concerned with rising drug prices. Over half of them indicated that drug prices had “increased a lot” from 2017 to 2020.
I was never a Trump supporter due to his racism, misogyny and promotion of divisiveness. However, I was 100% in favor of his idea about using an executive order to permit importing pharmaceuticals from Canada. But, like many items that could have been positive in his term, he never followed through with implementation as stated above. In fact, only 31% of American believed that he made any progress on the subject of drug pricing, even though he frequently brought it up in his speeches.
If not for the COVID-19 pandemic, drug pricing certainly would have been a key issue in the November 2020 election. Democrats in the House had approved the Elijah E. Cummings Lower Drug Costs Now Act, which Mitch McConnell in the GOP-controlled Senate promptly made sure never was brought up for a vote, even though 72% of Republicans polled thought that it should have been considered and voted upon by the Senate. That bill would have permitted DHHS to negotiate pricing with pharmaceutical firms for key drugs, a good if limited start.
Among Democrats, 45% saw the drug pricing issue as very important pre-pandemic, as did over a third of independents. Instead, Biden and national Democrats (correctly) zeroed in on Trump’s complete mismanagement of the U.S. response to the virus. And won the election.
President Biden recently issued an executive order to improve market efficiencies. But he did not spell out legalizing importation of drugs from other nations or negotiation of pricing. He could have, among other specific recommendations that are listed in a recent Commonwealth Fund report.
Why do we need government intervention related to pharmaceutical pricing? Because normal competitive market theory just does not work in healthcare, where the U.S.A. pays the highest drug prices in the developed world, even though many pharmaceutical manufacturers are based here.
A recent analysis of drug pricing revealed that the U.S. pays more than two-and-a-half times the price that the 32 OECD nations do. We pay nearly 8 times as much for brand name drugs versus Turkey, which should have very little leverage compared to the USA.
As a corporate VP and SVP, I spent nearly 20 years’ supervising cost analysis of drug pricing for major U.S. hospital systems and physician groups. I found that large, for-profit group purchasing organizations could lower prices by 10% to 20% over what these providers could do on their own -- with one exception: Canada.
I supervised multiple analyses in four Canadian Provinces. Their prices were amazingly better than our lowest pricing, even though we purchased billions in drugs annually, much more than they did. And the kicker is that, among the G7 nations included in the Rand study, Canada drug pricing was found to be more expensive than the UK, France and Italy.
Now is the time for President Biden to set things right. Let’s not let Big Pharma continue to price gouge U.S. citizens while cutting deals with other nations. The executive order is a step in the right direction. The next step is to get Congress to put into law true major reform measures, like most-favored-nations pricing and permitting Medicare to negotiate prices for all prescription drugs.
Jack Bernard was the first director of health planning for Georgia. A Republican, he’s a former chairman of the Jasper County Commission.
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