The Mercury News - Editorial: Bring transparency to prescription drug pricing
Pharmaceutical companies need an intervention to address their addiction to prescription drug price gouging. Californians should demand that Big Pharma be more transparent about drug pricing habits and put an end to industry practices that state Sen. Ed Hernandez says benefit drugmakers at the expense of taxpayers.
The West Covina Democrat has the answer. Hernandez’ SB 17 would require prescription drug companies to give 90 days notice before raising the price for medications. It would also require the industry to provide detailed accounting of the money Californians spend on prescription drugs.
The bill deserves to breeze through the Legislature and get a quick signature from Gov. Jerry Brown. But when Big Pharma and its army of lobbyists get involved, nothing comes easy.
Hernandez’ bill passed the Senate Health Committee on Wednesday and was sent to the Senate Appropriations Committee. Hernandez had to pull a similar bill last year when the pharmaceutical industry convinced the Assembly Appropriations Committee to add several amendments that gutted the reporting requirements. Hernandez will need consumers to weigh in with their representatives to ward off Big Pharma’s intense lobbying this time.
Pharmaceutical companies deserve a reasonable return for their substantial investments in research and development of drugs. But “reasonable” isn’t enough for them when there’s a potential to gouge consumers for medicines they need to stay alive.
Americans spend nearly $400 billion a year on prescription drugs. The average American now pays more than $850 a year for drugs, compared with $400 per person in most other industrialized nations.
Big Pharma tends to jack up prescription drug prices by about 10 percent a year, without justifying the price increases or giving advance warning of significant hikes. The extreme example of price gouging is EpiPen, the injection containing epinephrine — a life and death need for people allergic to bee stings, which jumped in price from $100 for a two-pack in 2009 to more than $600 in 2016.
That’s precisely the point behind Hernandez’ legislation. The pharmaceutical industry continues to oppose explaining the timing of their price increases and how they are justified.
In addition to the 90-day notice for any substantial price hike, Hernandez’ bill would require Big Pharma to provide an annual list of the 25 most frequently prescribed drugs in California and the 25 most expensive drugs based on total spending in the state.
President Trump promised during his campaign to take major steps to lower prescription drug costs, but Californians shouldn’t hold their breath. The GOP’s most recent health care bill that died in Congress contained no provisions regarding drug prices, and Trump’s choice to head the Federal Drug Administration is a former Big Pharma consultant. So much for draining the swamp.
Given the evidence of capricious price increases, drug companies should have to explain why the price Californians pay for prescription drugs is reasonable. Hernandez’ SB 17 will bring needed transparency to that process without putting an undue burden on pharmaceutical companies.
Read the editorial here: http://www.mercurynews.com/2017/04/24/editorial-bring-transparency-to-prescription-drug-pricing/