grassroots anger. In a late 2016 poll, 24 percent of respondents told the Kaiser Family Foundation that they or a family member cut back or skipped medication because of cost.
In a 2017 KFF poll, 92 percent of people said the federal government should use the vast buying power of its Medicare program to directly negotiate drug prices. It was the most popular suggestion among several for lowering drug costs. Next highest: 87 percent said it should be easier for generic drugs to come to market.
Industry executives and their powerful lobbyists argue that lower co-pays would quell the anger. They’d like to see a cap on out-of-pocket costs; it’s not clear whether the difference would come from federal subsidies or from pharmaceutical profits.
David Mitchell, an advocate for lower drug prices, pushed back against that notion on Twitter today:
“Those CEOs at the @SenFinance hearing keep saying patients only care about what we pay out of pocket. That is not true. We hear from patients everyday. They care about [out of pocket] AND prices, insurance premiums and taxes we pay to cover the total cost of the drug.”
Senators today repeatedly referenced their constituents’ burden and frustration. Innovation is wonderful, said Bill Cassidy (R-LA), “but when some patients can’t afford the medicine, it’s as if the innovation never took place.”
While more Republicans took pains publicly to thank the industry for its life-saving work, both sides of the aisle have pharma in their sights. Wyden and Finance Committee chair Charles Grassley (R-IA), who presided over today’s hearing, are conducting a bipartisan investigation into insulin prices.
In the House, Democrats have launched a broader investigation.
In 1959 and 1960, Senate hearings led to new laws and a more muscular FDA. Little has happened to curtail the industry since. For more than a decade, the drug industry has not just staved off unfavorable regulation, but has received tremendous benefits, such as tax breaks, more streamlined drug reviews, and vast new markets, thanks to the Medicare Part D prescription drug benefit that passed in 2003.
While the storm of drug-price reform has gathered for months on the horizon, investors have seemed nonplussed. Since the release of a White House drug-reform blueprint last May—the first indication that the administration would craft policy beyond the president’s blustery tweets—the Nasdaq and NYSE biotech indices are up 9 percent and 10 percent, and the NYSE big-pharma index more than 12 percent.
Photo of U.S. Capitol by Kevin Dooley via Creative Commons.
