It’s no secret drug prices are on the rise. Price hikes that would be considered criminal in other parts of the health-care sector have become the norm. Headlines declaring 1,000 percent increases on decades-old prescriptions and new therapies hitting the market with price tags similar to a new home are no longer novel. We cannot allow this trend to continue.
In Fresno County, nearly half our population is enrolled in Medi-Cal, and Medi-Cal is one of the programs that’s been hit hardest by out-of-control prescription price spikes. California’s 2016-17 budget allocates nearly $1 billion to cover the cost of outrageously expensive Hepatitis C treatments for Medi-Cal enrollees. That’s the cost of just one drug in just one program.
Over all, Medi-Cal has struggled through a near 60 percent increase in drugs it covers costing $600 or more. This story continues across California’s state programs – prisons saw a 44 percent increase in prescription drug spending and the public pension system CalPERS saw a 27 percent rise. And there’s no end in sight.
Despite multi-pronged approaches to find solutions to the problem spearheaded by patients, health-care providers, labor unions, consumer advocates and almost every group except the pharmaceutical industry, nothing has been done. Drug companies continue to push the limits on drug prices, and we continue to pay the price. Specialty-drug price increases were one of the driving factors in 2017 health premium increases.
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As a physician, I know the value of medical advancements. I know how breakthroughs can change patients’ lives. But I also know that these therapies should be offering patients hope, and instead, they’re ballooning state budgets, driving up health-insurance premiums and placing an incredible amount of unnecessary pressure on critical state programs.
In Fresno County, where nearly half our residents are enrolled in a state program that’s being hamstrung by drug companies, we must ask why this is happening and how we stop it.
The pharmaceutical industry has entirely escaped the transparency requirements and other regulations that cover the rest of the health-care sector. Physicians, health plans, hospitals and more all report on spending – but the industry that’s driving up prices for everyone is allowed to operate in the dark. We need to end the era of drug-company secrecy and begin to collaborate on how to achieve reasonable drug prices and bring sanity back to health-care costs.
By requiring drug companies to provide advance warning on major price hikes, we can give large purchasers the time needed to prepare and the tools to better negotiate. This is a critical change that we need now.
SB 1010 will also require annual reporting on what goes into drug pricing so we can better safeguard the millions of taxpayer dollars that go into developing drugs every year and debunk claims that research and development drive price increases. This will help us finally get to the bottom of why costs are going through the roof.
SB 1010 is common-sense change that will provide Californians with the tools to put the brakes on this disastrous trend. With the health care of millions on the line, we simply cannot afford to wait.
Smita Rouillard, M.D., is physician in chief at Kaiser Permanente Fresno.