During his State of the Union address, the president called on Congress to pass the Prescription Drug Pricing Reduction Act to help lower the drug bills of struggling Americans. And, off the heels of his speech, Vice President Mike Pence endorsed the bill in an effort to push lawmakers to act quickly in order to provide financial relief to millions of Americans, including us here in Colorado. A recent Morning Consult poll reported that nearly 92 percent of our state’s voters said that drug prices are an important issue for them and 71 percent blamed pharmaceutical companies for rising prices, but lawmakers have yet to pass legislation that would prevent price gouging, which has put our residents in harm’s way.
Twenty-nine percent of Coloradans have skipped filling their prescriptions or stopped taking their drugs altogether due to rising prices. But forgoing prescribed medication puts lives at risk, increasing the chances of medical complications. Denver resident Rachel Wall, who has a rare genetic disease that causes swelling, said that while her “disease is treatable,” it doesn’t matter because she “can’t afford the medication” she needs, forcing her, like other residents, to make tough, lose-lose financial decisions. “I endangered my life because I had to calculate what I could afford that month: eating or breathing,” Rachel said.
The price of brand-name prescription drugs, of which many don’t have generic alternatives, have increased almost 58 percent, while annual incomes in our state rose by 12 percent. The rise in drug prices doesn’t match an increase in our incomes. “It doesn’t matter where you go, who you talk to, or how they vote, skyrocketing prescription drug costs are a major concern for Coloradans,” said Adam Fox, a spokesman for the Colorado Consumer Health Initiative. In particular, 72 percent of Colorado voters want Congress to quickly pass the Prescription Drug Pricing Reduction Act, which was introduced by Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Oregon. In a divided Congress, the bill is one of the few pieces of legislation that has bipartisan support and uses common-sense measures to help Americans.
The bill would first establish an annual cap of $3,100 on out-of-pocket drug expenses for Medicare beneficiaries, curbing taxpayer subsidies to the pharmaceutical industry. Under current law, there is no limit to cost-sharing, making it hard for seniors who take several drugs to pay for their prescriptions and forcing many of them to ration their doses. Thirty-seven percent of Colorado Medicare beneficiaries say they are worried about affording their prescription drugs and 23 percent of seniors nationwide say that they have a difficult time paying for their medication. But once the bill is passed, they would save more than $30 billion in out-of-pocket costs, and taxpayers would save an additional $100 billion.
The Prescription Drug Pricing Reduction Act would have pharmaceutical companies that raise their prices faster than the rate of inflation pay a rebate to Medicare. This would provide drug manufacturers without competition an incentive to not hike their prices and encourages them to actually lower them. Patients who aren’t on Medicare would see a drop in prices in the consumer market.
Of course, companies that take risks to create new drugs and invest in research should be able to profit for their efforts. It’s what incentivizes pharmaceutical companies to innovate. This bill, on the other hand, prevents primarily those with monopolies over the drug market from taking advantage of our system and caps taxpayer-funded subsidies to a private industry. In other words, it prevents crony capitalism in order to increase competition, which is good for patients and the pharmaceutical industry.
“America’s drug pricing regime is broken. It requires reform to sustain fiscal sustainability and steer incubation and innovation forward. It needs more transparency, better incentives and real competition to drive down prices,” said Sen. Grassley. I hope Sen. Cory Gardner, who is leading a battle of his own against Big Pharma, joins Sen. Grassley, President Trump, Vice President Pence, and the bipartisan coalition of lawmakers that backs this bill in lowering prescription drug prices nationwide.
Kevin Priola, a small-business owner, represents District 25 in the Colorado Senate.