The American Association of Retired Persons (AARP) is calling on its powerhouse of 37.8 million members to tell the powers that be in Washington D.C. that it’s time to do something about rising drug costs.
One of the largest advocacy groups in the world, AARP, is targeting high prescription drug prices with the launch this week of its “Stop Rx Greed” campaign.
The new nationwide campaign focuses on federal and state solutions that the AARP hopes to bring about to cut drug prices “now.”
In a letter to the United States Congress and President Donald J. Trump, AARP said it has been tracking prescription drug costs for the last 15 years, and what they’ve found is disturbing.
The senior advocacy group says annual price increases for brand-named drugs have exceeded the corresponding rate of inflation every year since at least 2006, and that the retail prices for brand-named drugs in 2017, increased four times the rate of inflation.
“The goal of AARP’s sustained campaign is to help drive down drug prices for all Americans by advocating for a variety of legislative, executive and regulatory actions at both the federal and state level,” the AARP announced in a statement.
And they want lawmakers to hear from their constituents. They are asking all of their members to “tell Congress to Stop Rx Greed and cut drug prices now.” They’ve even provided a pre-written letter for that specific purpose. All members have to do is pass it along.
In it, AARP says, “As your constituent and an AARP member, I urge you to act now to cut prescription drug prices for seniors and all taxpayers. Americans depend on their prescriptions — but from cancer treatment to EpiPens, and beyond, drug companies’ skyrocketing prices are putting life-saving treatments out of reach for far too many.”
What’s more, these outrageously high prices affect all Americans by raising taxes, premiums, and out of pocket costs for everyone. Drug companies spent a whopping $6.1 billion marketing their products to consumers in 2017. It’s not fair to make American consumers foot the bill for big drug companies’ lobbyists and flashy marketing campaigns.
As a first step towards lowering prescription drug prices, I urge you to support legislation that would allow Medicare to negotiate for lower drug prices and to stop drug companies from protecting their monopolies by keeping their competitors from bringing lower-priced drugs to market. These commonsense steps would help make sure Americans don’t continue to pay the highest prescription drug prices in the world.”
Consumers, insurers and the government collectively spent $333 billion in 2017 on prescription drugs, according to National Health Expenditure (NHE) data—a more than 41 percent increase over the previous decade. And under current law, national health spending is projected to grow at an average rate of 5.5 percent per year for 2018-27 and to reach nearly $6 trillion by 2027, says the NHE.
“Americans are paying the highest prescription drug prices in the world,” said Executive Vice President and Chief Advocacy & Engagement Officer Nancy LeaMond said in a statement. “It’s time for pharmaceutical companies to stop deflecting blame and acknowledge that the root cause is the price they set for their products.”
Not everyone agrees, however. Citizens Against Government Waste (CAGW) a million-member, non-partisan but fiscally conservative non-profit organization holds that throughout history, governments around the world have unsuccessfully attempted to control the prices of goods and services. “These efforts have disrupted the marketplace and created shortages or excesses,” the organization states in its 2016 policy paper, “Pharmaceutical Price Controls: A Prescription for Disaster.”
“But just like zombies, price controls keep rising from the dead because politicians seem to think they can create a better methodology,” the introduction to the paper reads. “They never learn that price controls do not work and end up hurting the economy, consumers and taxpayers. The latest effort to control prices is focused is on prescription drugs.”
The CAGW contends that while it is understandable that patients, insurers and politicians react passionately to high costs, “more competition, not price controls, will resolve this matter. The added benefit of competition is more research and innovation, which otherwise would be hampered with price controls.”
And by some estimates it can cost well over $2 billion to bring a new drug to market. According to Policy & Medicine, an online publication that analyzes legal, regulatory and compliance issues affecting the pharmaceutical and device industry, “Developing a new prescription medicine that gains marketing approval is estimated to cost drug makers $2.6 billion according to a recent study by Tufts Center for the Study of Drug Development. This is up from $802 million in 2003—equal to approximately $1 billion in 2013 dollars, and thus a 145 percent increase in the ten-year study gap. Furthermore, while the average time it takes to bring a drug through clinical trials has decreased, the rate of success has gone down by almost half, to just 12 percent.”
Still, CNBC Make It reported in January that while pharmaceutical companies often attribute high prices to innovation, arguing that new and improved drugs are naturally more expensive, “a new study published in the journal Health Affairs complicates that idea. It suggests that, largely, costs have gone up because companies are raising the price of drugs that are already available.”
And while some increased prices, such as those for specialty and generic drugs, do seem to be driven by the entry of new medications into the market, CNBC reports, “price increases don’t necessarily reflect improvement or even change.”
“Pharmaceutical companies kicked off the new year with significant price hikes,” CNBC reported. “Dozens of drug makers raised the list prices of hundreds of medications an average of 6.3 percent on Jan. 1, according to a recent analysis from the health software company Rx Savings Solution.”
According to NPR, Gerard Anderson, professor of health policy and management at Johns Hopkins University, said “price increases on existing drugs not only benefit drug makers, but also insurers, who can make more money through rebates on higher priced drugs.”
“Research and development is only about 17 percent of total spending in most large drug companies,” he told NPR. “Once a drug has been approved by the FDA, there are minimal additional research and development costs so drug companies cannot justify price increases by claiming research and development costs.”
The new study did find that prices rose on certain types of drugs due to innovation, NPR reported. The lead author of the study and an assistant professor of pharmacy and therapeutics at the University of Pittsburgh, in Pennsylvania (UPIT), Inmaculada Hernandez, and her team “found that from 2008 to 2016, the price of so-called specialty drugs rose 21 percent for oral medications and 13 percent for injectable drugs. These increases were driven by new, innovative drugs like Sovaldi and Harvoni, two medications made by Gilead Sciences, Inc. that can cure Hepatitis C. Both drugs were initially priced at over $80,000 for a course of treatment.”
The “Stop Rx Greed” campaign comes in the wake of a multi-cultural national survey of 2,025 adults ages 50-plus that AARP released this month. The survey found that significant majorities of self-identified Republican, Democrat and Independent voters share concerns about high drug prices and overwhelmingly support formulating new policies that will lower them, including requiring drug makers to make it easier to develop new generics as well as requiring them to explain how they set their prices.
According to AARP, the poll revealed that prescription drug use is widespread among 50-plus Americans, with 80 percent saying they regularly take at least one prescription drug. And 47% said they delayed filling or did not get a prescription filled because they couldn’t afford it.
In addition, some 60% of those who participated in the “2019 Prescription Drug Survey” said they considered prescription drug costs to be “unreasonable and many indicated they have or will need to make trade-offs to afford their medications,” AARP reported.
With the campaign, AARP says it hopes to “stop price gouging by allowing Medicare and states to use their vast buying powers to negotiate for lower drug prices and allowing state attorneys general to take legal action against drug manufacturers for excessive drug price hikes.”
The advocacy group also supports:
- Increasing access and affordability of prescription drugs by capping out-of-pocket costs for consumers,
- Expanding the availability of state pharmaceutical assistance programs,
- Allowing states to safely import prescription drugs from other countries,
- Protecting a recent Medicare improvement that helps beneficiaries with high prescription-drug costs.
- Closing loopholes that allow drug manufacturers to delay or even block the development of lower-cost generics,
- Ban deals that allow pharmaceutical companies to pay generic firms not to bring a competing product to market, and
- Supporting laws that promote transparency by requiring drugmakers to justify dramatic price increases.
“People just inherently can’t understand why some of these drugs cost so much,” says John Hishta, AARP’s senior vice president of campaigns. “We believe now is the time to launch a nationwide campaign to harness all of this frustration and anger within the voting public and put public pressure on elected officials both at the federal level and state level to take action.”
“Virtually all the voters surveyed (regardless of party affiliation) support various proposals for reducing prescription drug costs, including making it easier for generic drugs to come to market (93%) and allowing Medicare to negotiate with drug companies for lower prices (92%),” AARP reported.
This information is not new. The Secretary of the Department of Health and Human Services (HHS), under current law, is explicitly prohibited from negotiating directly with drug manufacturers on behalf of Medicare Part D enrollees—an idea that has been kicked around in Medicare policy discussions for over a decade. The Kaiser Family Foundation (KFF), a non-profit organization that reports on national health issues, as well as the role of the United States in global health policy, reported in 2018 that some 92% of the public supports the federal government negotiating drug prices for Medicare beneficiaries, including a majority of Democrats (96%), Republicans (92%), and Independents (92%) and the National Academies of Sciences, Engineering, and Medicine.
The stipulation that government can have no role in negotiating or setting drug prices in Medicare Part D is in stark contrast to how drug prices are determined in some other federal programs, the KFF reports, such as the statutory requirement for mandatory drug price rebates in Medicaid or the “requirement that drug manufacturers charge the Department of Veterans Affairs (VA) no more than the lowest price paid by any private-sector purchaser.”
“President Trump has said he will bring down drug prices,” the KFF reported, “and has repeatedly criticized the current-law policy that prohibits the government from negotiating with pharmaceutical companies in an effort to lower drug prices in Part D and achieve federal savings. He has also said ‘we don’t bid properly and we’re going to start bidding.’”
Still, neither Congressional leaders nor the president have not come up with a way to reduce drug costs.
“Proponents believe that giving the HHS Secretary the authority to negotiate drug prices on behalf of millions of Medicare beneficiaries would provide the leverage needed to lower drug costs, particularly for high-priced drugs for which there is no competition and where private plans may be less able to negotiate lower prices,” the KFF reports. “Opponents believe the Secretary would not be able to get a better deal than private plans already do. They also express concern that price negotiations would limit the ability of pharmaceutical companies to invest in pharmaceutical research and development.”
According to AARP, the Stop Rx Greed campaign will include national television, radio and digital ads, editorial content, emails to members, social media posts, ongoing advocacy and grassroots activity in D.C. and the states, and a petition calling on Congress and the Trump Administration to take action now. As part of the campaign, AARP said it will push for support of a number of policy solutions at the national and state level to help lower drug prices including:
- Allowing Medicare to negotiate for lower prescription drug prices.
- Allowing states to negotiate lower prices with drug companies.
- Giving state Attorneys General authority to crack down on outrageous price increases.
- Clamping down on pay-for-delay and other loopholes that keep lower cost generic drugs off the market.
- Capping consumers’ prescription drug out-of-pocket costs.
- Preserving state pharmacy assistance programs.
“There’s no one solution that’s going to solve this issue,” said John Hishta, AARP Senior Vice President of Campaigns. “Success will be when consumers are no longer price-gouged by the drug industry and can afford the drugs they need.”
For more about Stop Rx Greed, visit www.aarp.org/rx.