Led by their trade group, the Pharmaceutical Research and Manufacturers of America, drugmakers insist that they have consumers’ best interests at heart and warn that over-regulation would hamper their ability to deliver life-saving drugs.
Californians have given drugmakers the benefit of the doubt, rejecting an initiative last year that sought to rein in drug prices, thanks in part to the industry’s $110.5 million campaign against the measure. Legislators last year bent to the industry’s will by killing a bill to require transparency in drug pricing.
This year, the industry again is asking that legislators reject transparency legislation, saying in a letter that the bill would do nothing to help patients and could lead to drug shortages that would harm “rural and disadvantaged communities.”
In Washington, D.C., meanwhile, Senate Majority Leader Mitch McConnell, encouraged by President Donald Trump, seems determined to force a vote as early as Tuesday on his Better Care Reconciliation Act, which would gut the Affordable Care Act.
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The bill, the Congressional Budget Office says, would strip 15 million Americans of health insurance by next year. It would threaten health care for more than 4 million Californians and could cost California’s budget $24 billion to $30 billion a year within a decade, the equivalent of all the money spent by the state on public universities, colleges, prisons and parks.
The American Medical Association, representing physicians, opposes the McConnell-Trump bill. Governors from both parties denounce it, and hospitals and major health plans oppose it. So do patient advocacy groups, including the American Cancer Society, American Heart Association and American Lung Association.
And yet the Pharmaceutical Research and Manufacturers of America is silent. The industry takes a stand of neutrality, despite spending $78 million to lobby in Washington this year, as counted by the Center for Responsive Politics.
Exactly why the pharmaceutical industry ducks is not clear. Perhaps drugmakers fear Trump would exact revenge by, say, trying to impose price controls on prescription drugs. Perhaps the companies believe that gaining Trump’s blessing for new fast-track approval by the U.S. Food and Drug Administration is more valuable than taking a stand. Whatever the reason, the neutrality belies an appalling lack of care for patients.
Back in Sacramento, drug companies fight to kill Senate Bill 17, which would force some transparency in drug pricing. The bill by Sen. Ed Hernandez, D-West Covina, is expected to face a final vote when legislators return in August. It would apply to drugs that cost more than $40 a month and would require drug companies to issue 60-day notices when they intend to raise prices by more than 10 percent over a two-year period. It seems perfectly reasonable, so much so that Sen. John McCain, R-Ariz., working with congressional Democrats, has introduced similar legislation.
In a letter supporting SB 17, the California Public Employees’ Retirement System wrote that it spent $2.1 billion on prescription drugs in 2015, 26 percent of the $8 billion it spent on health care. More alarming, CalPERS’ cost of specialty drugs, generally high-priced and complex biologics, more than doubled to $587 million in 2015 from $270 million in 2012. Greater transparency “will help large group health plan purchasers like CalPERS understand the impact of drug pricing on overall health care costs,” the letter says.
Drug companies contend SB 17 would do nothing to reduce prices. Legislators should listen to their critique. They should also take it for what it’s worth, knowing that on the most critical health care issue of our time, the future of the Affordable Care Act, drug companies have nothing to say.