Health Care

Soaring Drug Prices May Be the Next Big Thing for 2016 Contenders

New polling finds public is concerned about rising cost of prescription drugs.

Pharmacy Offers Steep Discounts On Prescription Medication
National Journal
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Dylan Scott
April 21, 2015, 1 a.m.

Head­lines con­sist­ently warn that prices for pre­scrip­tion drugs are spik­ing high­er and high­er. Half of Amer­ic­ans are tak­ing them reg­u­larly. Obama­care touched most corners of the health care in­dustry, but didn’t ad­dress drug costs spe­cific­ally.

Now Hil­lary Clin­ton is sig­nal­ing in pub­lic com­ments that pre­scrip­tion-drug af­ford­ab­il­ity will be a pri­or­ity in her com­ing cam­paign. “We need to drive a harder bar­gain ne­go­ti­at­ing with drug com­pan­ies about the costs of drugs,” she said in Iowa last week, per MS­N­BC.

The is­sue is shap­ing up to be one of the next fron­ti­ers for health care re­form in this coun­try.

(RE­LATED: Where the 2016 Can­did­ates Stand on Health Care)

That was also the con­clu­sion of a Kais­er Fam­ily Found­a­tion poll re­leased Tues­day morn­ing. Asked what the next health care pri­or­ity should be for the White House and Con­gress as Obama­care settles in­to its fifth year, 76 per­cent of Amer­ic­ans said “mak­ing sure that high-cost drugs for chron­ic con­di­tions … are af­ford­able to those who need them.” And 60 per­cent, in­clud­ing a slim ma­jor­ity of Re­pub­lic­ans, said they sup­port gov­ern­ment ac­tion to lower pre­scrip­tion-drug prices.

The day be­fore the Kais­er poll came out, the Cam­paign for Sus­tain­able Rx Pri­cing, an off­shoot of the Na­tion­al Co­ali­tion on Health Care, a broad ad­vocacy group, re­leased a re­port titled “Spe­cialty Drug Hyper­in­fla­tion: The Risk to Pa­tients and the Health Care Sys­tem.” (The re­port’s dia­gnos­is was dire).

It is easy to fig­ure out why the pub­lic is in­ter­ested in pre­scrip­tion costs. A re­cent Cen­ters for Dis­ease Con­trol and Pre­ven­tion re­port found that nearly half of Amer­ic­ans take at least one pre­scrip­tion drug. Oth­er stud­ies have put the num­ber as high as 70 per­cent. More than 20 per­cent of Amer­ic­ans had taken three or more pre­scrip­tions in the last 30 days, the CDC said.

(RE­LATED: Hil­lary Clin­ton Doesn’t Seem All That Scared of Obama­care)

At the same time, pre­scrip­tion-drug prices are spik­ing. In Novem­ber, the Chica­go Tribune re­por­ted that the av­er­age price for the 50 most pop­u­lar gen­er­ic drugs had in­creased 373 per­cent from 2010 to 2014, from $13.14 to $62.10. A May 2014 Bloomberg re­port tracked sim­il­ar trends: One dia­betes drug’s price in­creased 160 per­cent from 2007 to 2014, while the over­all con­sumer price in­dex went up by just 12 per­cent. (The drug in­dustry has con­ten­ded that high out-of-pock­et costs res­ult­ing from in­sur­ance plan designs are to blame for the pinch Amer­ic­ans are feel­ing.)

One pop­u­lar idea among Demo­crats is al­low­ing the fed­er­al gov­ern­ment to ne­go­ti­ate with phar­ma­ceut­ic­al com­pan­ies on the cost of pre­scrip­tion drugs for Medi­care, which cov­ers more than 50 mil­lion Amer­ic­ans. Pres­id­ent Obama put the idea in his 2016 budget, though it was re­stric­ted to some high-cost spe­cialty drugs. Lib­er­als have pushed for ne­go­ti­at­ing the price of all drugs covered un­der the gov­ern­ment in­sur­ance plan.

Re­pub­lic­ans have warned that Medi­care’s size means such a meas­ure would lead to out­right price con­trols, though the party’s pres­id­en­tial con­tenders have been quiet on the is­sue in the early go­ing. Sen. Marco Ru­bio pro­posed a broad­er over­haul of fed­er­al reg­u­la­tion last year, cre­at­ing a new re­view board to help as­sess reg­u­la­tions’ costs, a move that con­ser­vat­ives ar­gue would help bring drug (and oth­er products’) costs down.

(RE­LATED: How the 2016 Re­pub­lic­ans Will Fight Over the Fu­ture of Obama­care)

Giv­en the Kais­er poll’s find­ings and Clin­ton’s com­ments, they’ll likely be talk­ing about it more soon.

Law­makers and White House as­pir­ants will have a pretty clean slate to work with. Pre­scrip­tion drugs are one of the 10 es­sen­tial health be­ne­fits that in­sur­ance must cov­er un­der the Af­ford­able Care Act, and the law has ex­ten­ded health cov­er­age to up­wards of 20 mil­lion Amer­ic­ans.

But it didn’t do much to sys­tem­at­ic­ally ad­dress drug costs. “Tech­nic­ally noth­ing,” is the way Cali­for­nia Health­line put it last year, though there are a few rel­ev­ant pro­vi­sions that lower costs for pay­ers: The law ex­pands the Medi­caid’s drug re­bate pro­gram and closes the Medi­care donut hole.

The law might give the fed­er­al gov­ern­ment some au­thor­ity to reg­u­late pre­scrip­tion cov­er­age on Obama­care’s in­sur­ance mar­kets, says Larry Levitt, vice pres­id­ent for the non­par­tis­an Kais­er Fam­ily Found­a­tion, but the gov­ern­ment has little au­thor­ity un­der cur­rent law to reg­u­late costs in the em­ploy­er mar­ket, where most Amer­ic­ans get cov­er­age.

“The ACA doesn’t really have any pro­vi­sions tar­geted at bring­ing down the cost of drugs over­all,” Levitt said. “Pre­scrip­tion drugs are by far the fast­est grow­ing part of the health sys­tem right now.”

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