The San Francisco Chronicle - Opinion: Require drugmakers to report when they raise prices
By Ed Hernandez and Tom Steyer
Big Pharma is everywhere.
Ads for the latest and greatest “lifestyle” drugs clog our magazines and spill out of our TVs. Every ailment is now a disease with a name and a medication to match.
The truth is, we can’t avoid Big Pharma because it’s the only game in town. Thanks to government-authorized monopoly protections, we have no choice but to pay whatever price Big Pharma charges, no matter how high.
But despite Big Pharma’s high profile, it still operates in the shadows, and the industry likes it that way. Companies such as Eli Lilly and Novo Nordisk can jack up the prices of their signature drugs suddenly and with no justification.
Take insulin, the difference between life or death for millions of Americans suffering from diabetes. Over the past two decades, the price has skyrocketed. A single 10-milliliter vial — less than a month’s supply for most adults — is now around $250 compared with $21 in 1996.
Big Pharma wants us to believe that such costs reflect the expensive nature of research and development. But what the pharmaceutical companies spend on research, clinical trials and their 24/7 advertising campaigns is kept hush-hush. One study found that for every $1 drug companies spend on R&D, they spend $19 on advertising.
Time and again, state legislatures have tried to force Big Pharma to reveal the true costs of drugs, only to be blocked by its powerful lobby.
This is why the two of us are teaming up. We’re joining with a broad coalition of consumers, business, labor, local government and health care professionals for a single purpose: to make Big Pharma accountable to the people when it comes to escalating drug prices.
Senate Bill 17 simply requires drugmakers to provide written notification to the state and to insurers when they decide to raise prices or introduce a new and very expensive drug.
For the first time, drugmakers will have to explain to the public why their drugs cost so much.
Last year’s attempt to pass a similar law in California was derailed by industry opposition. The arguments trotted out by the drug companies are tired ones. They say patients end up paying far less than the listed price because drugmakers offer coupon programs and other discounts. But this hides the true cost of drugs, driving up insurance premiums.
Consumer spending on prescription drugs increased by a staggering $65 billion from 2012 to 2015, according to the Kaiser Family Foundation. Yet instead of reining in these price hikes, Big Pharma prefers to test our outrage.
A federal lawsuit filed against Eli Lilly, Novo Nordisk and Sanofi alleges that the three makers of insulin have engaged in collusion. On multiple occasions, Novo Nordisk and Sanofi raised their price for insulin at the same time and rate.
Today, too many diabetics face an impossible choice: pay for life-saving medicine or pay their mortgage.
Pharmaceutical companies have a right to make a profit when they develop breakthrough medicine, but they have no right to abuse their market power to hurt the public.
We’ve all had enough. We ask the public to join us in holding Big Pharma accountable. It’s time to shine a light into the deep shadows of drug pricing. SB17 will do that.
Ed Hernandez, a Democrat, represents West Covina (Los Angeles County) in the state Senate. Tom Steyer of San Francisco is the founder and president of NextGen California.
Read the opinion editorial here: http://www.sfchronicle.com/opinion/openforum/article/Require-drugmakers-to-report-when-they-raise-11081982.php