Merkley offers his ideas to restrain drug costs
U.S. Sen. Jeff Merkley has sponsored drug-pricing legislation that he hopes Joe Biden will make part of the next presidential spending plan to help American families.
The Oregon Democrat has floated some of these ideas previously, and he has put them in a bill he is sponsoring with Democratic Rep. Peter Welch of Vermont. But Merkley says they will stand a better chance if Biden incorporates them into a follow-up to the $1.9 trillion pandemic recovery plan, which Democratic congressional majorities passed and Biden signed on March 11.
"My goal right now is to make this such a prominent issue that his team feels compelled to address it in the American Families Plan," he told reporters on a conference call Thursday, April 22. "It is a perfect fit, and this is a great moment for he and his team to go bold."
The recovery plan included increased federal subsidies for private insurance premiums, and greater federal incentives for the remaining 12 states to expand Medicaid coverage, under the 2010 Affordable Care Act.
Like his colleague Ron Wyden, who offered his own ideas last month, Merkley said it's time for Congress to help lower the cost of medications. He also said Congress should restore the ability of the federal government to negotiate drug prices for Medicare, the federal program of health insurance for people 65 and up and for some people with disabilities.
"This is the moment we really have to press for getting this right," Merkley said. "I think this is best done through legislation because it is enduring," and not subject to change with executive orders by each new president.
Like Wyden, Merkley said the issue comes up in most virtual town hall meetings he conducts these days. He mentioned someone from Washington County who depends on Rifaximin, a drug that counteracts brain toxins resulting from liver disease. The U.S. price for a 60-day supply was $3,000, compared with $90 in India.
About two-thirds of U.S. adults take at least one prescription medication — and Merkley said 80% say prices are too high.
"The only people in the United States who think drug prices are not too high are those getting rich from drug company profits," he said. "I have a few ideas drug companies would not like at all, but that consumers do like."
Three main points in the Merkley-Welch bill:
• U.S. drug prices would be set at the median (half above, half below) of prices charged in 11 developed nations. On the list are Australia, Canada, Japan and eight in Europe: France, Germany, Great Britain, Italy, the Netherlands, Spain, Sweden and Switzerland. "This establishes a reference price, and it would apply to all patients in the United States market."
When then President Donald Trump offered a similar proposal in 2018 — using the lowest price as the U.S. price — Merkley attempt to enlist his support. But Trump never followed through, and when Trump proposed something different later, "it was not a plan that seriously attacked the cost of drugs."
• The Department of Health and Human Services would regain authority to negotiate prices with drug manufacturers for Medicare, which accounted for 21% of U.S. health care spending in 2019. Republican congressional majorities barred the federal government from doing so in 2003, when they approved prescription-drug coverage under Medicare. The Democratic-controlled House passed a measure in 2019, but it died in a Senate controlled by Republicans. Another bill is pending in the House.
Merkley said the Department of Veterans Affairs retains negotiating authority and has the results to show for it. According to a 2020 report by the Government Accountability Office, an arm of Congress, VA prices for 203 generic drugs were 68% less, and for 196 brand-name drugs, 49% less, than for Medicare. However, Medicare covers far more people than the VA, 58 million to 7 million.
• Drug makers would face $5 in penalties for every dollar they charge above specified prices. "I think that is going to be a forceful tool to make sure companies stay in line," Merkley said. Transparency is required for the sale, so it isn't like they can hide it."
Insulin cost at issue
A favorite target is the cost of insulin, developed a century ago to help people with diabetes control their blood sugar. Its price has tripled in the past decade.
A bill sponsored by Wyden and Iowa Sen. Charles Grassley, the top Republican on the Senate Finance Committee that Democrat Wyden now leads, would have been aimed specifically at insulin. Their bill gave insulin makers a choice between reducing its cost, pay a penalty if they maintain current prices, or pay even more in penalties if they increase prices.
Although the committee approved the bill on a split vote in 2019, Republicans were divided, and then-Majority Leader Mitch McConnell would not let it come to a vote of the full Senate.
Merkley dismissed as "bogus" the arguments by drug manufacturers that higher prices help underwrite research into new medications that come about after long trials. He said public money pays for much of that research — and drug companies spend far more on marketing than research, although much of that marketing is aimed at the doctors who do the prescribing, rather than consumers.
"If any group should get the benefit of lower prices, it should be American citizens," he said. "We spend a lot more money on the basic research that benefits the drug companies and provides the foundation for the drugs they develop. So we should get the best prices, not the worst."
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