How to bring down the high cost of prescription drugs

Thursday, June 6, 2019
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Guest Opinion

Americans pay the highest brandname drug prices in the world while drug companies rake in billions. Congress, the Administration, and Montana State legislators must take action to lower prescription drug prices.

In March, AARP launched a nationwide campaign urging federal and state policymakers to Stop Rx Greed by cracking down on price-gouging drug companies. AARP’s goal is to pressure our leaders to stick-up for people 50+ and find commonsense solutions that will address the root cause of unaffordable medications – the prices set by the drug companies.

The journey to lowering prescription drug costs for the average consumer and for seniors, really lies with the pharmaceutical manufactures themselves. Here are some commonsense solutions to help reign in the high costs of prescription drugs both at the federal and state levels:

Allow Medicare to negotiate prescription drug prices. Every year, Medicare spends more than $129 billion annually on prescription drugs, yet it is prohibited by law from negotiating lower prices. Medicare could have saved $14.4 billion on just 50 drugs in 2016 if the program had paid the same prices as the Department of Veterans Affairs, which is allowed to bargain for discounts. A buyer and a seller negotiating for a lower price – that’s what we do in a freemarket system -- and it’s what we should do because it would save taxpayers and our government billions.

Cap out of pocket costs. The Medicare Part D program makes medications more affordable for millions of seniors. One in 10 enrollees with high out-of-pocket costs spend at least $5,200 a year on their medicines. Many of these seniors have chronic conditionsmeaning they are facing these high costs for the rest of their lives. AARP urges Congress to pass legislation that would help seniors with these costs by capping out-ofpocket costs.

Improve access to lower-cost generic drugs: Brand-name drug companies purposefully slow down the availability of lower-priced generic versions of their drugs by entering into so-called “pay to play” agreements in which they pay generic drug companies to NOT produce a competing product. This is an anti-competitive practice that prevents generic drugs from reaching consumers. Congress has introduced a bill, the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act to prevent manufacturers from blocking the development of lower cost generics. Montana’s U.S. Senators Daines and Tester are co-sponsors of the CREATES Act.

Price Gouging: Give state Attorneys General the authority to take legal action against drug manufacturers for “unconscionable” drug price increases. Beginning in 2017, several states, including Maryland, are starting to give their attorneys general the authority to sue drug manufacturers who raise the prices of qualifying generic drugs to “unconscionable” levels.

State Importation: A few states are looking at the importation of safe, FDA-approved and affordable drugs from Canada as a means of reducing overall state expenditures on prescription drugs.

Bulk/Wholesale Purchasing: Some states have begun buying prescription drugs in bulk for some residents, including Medicaid beneficiaries, state employees and retirees. And some states are joining with each other to create even larger buying pools as a way to bring down the high cost of medicines.

Drug Affordability Commissions/ Rate Setting Commissions: In their simplest form, these laws seek to create commissions to set payment ceilings for what the state (or all payers) would pay for certain high cost drugs.

Prescription Drug Pricing Transparency: Recently, states, including Montana have been pursuing legislation that would require drug makers to report the reasons behind dramatic price increases in prescription drug costs. Currently, there are seven states that have enacted drug transparency laws.

After the Montana House overwhelmingly supported a transparency bill in April, the Senate voted it down on a tie vote (25 to 25), largely due to pharmaceutical lobbyist pressure. Go to the Montana state legislative website at and look up House Bill 710 to see how your state senator voted on this important cost saving piece of legislation.

Recently, AARP conducted a national survey of likely voters ages 50 and older. The survey found that significant majorities of Republican, Democrat, and Independent voters shared concerns about the high price of drugs, and support common-sense policies that will lower prices:

• 72 percent say they are concerned about the cost of their medications.

• 63 percent say the cost of prescription drugs is unreasonable.

• 90 percent support allowing Medicare to negotiate for lower drug prices.

• 80 percent report taking at least one prescription medication.

• Nearly 40 percent say they did not fill a prescription due to the cost.

No Montanan or American should be forced to choose between paying for the medicines they need and paying for food, rent, or other necessities. We urge lawmakers both here in Montana and in Washington D.C. to work together and pass bipartisan, commonsense legislation to lower prescription drug prices.

Mike Batista is the Director of Government Affairs for AARP Montana.