October 22, 2018

Weekly Column: U.S. Senate Takes Steps To Address High Prescription Costs

Guest column submitted by U.S. Senator Mike Crapo

There is growing concern over the rising cost of prescription drugs.  Drug manufacturers argue that the rising prices of these medications are largely due to the cost of research and development; however, it can be challenging for consumers to distinguish whether these claims are authentic.  As the U.S. continues to lead the world in the research and development of drugs that improve and extend lives, we must do more to ensure that those who need them most have access to affordable medication.  The U.S. Senate recently passed legislation to help address escalating drug costs. 

On May 11, 2018, the Trump Administration released “American Patients First,” a blueprint to lower drug prices and reduce out-of-pocket costs for American consumers.  According to the U.S. Department of Health and Human Services (HHS), the blueprint covers multiple areas, including improving competition and ending the gaming of the regulatory process; supporting better negotiation of drug discounts in government-funded insurance programs; creating incentives for pharmaceutical companies to lower list prices; and reducing out-of-pocket spending for patients at the pharmacy and other sites of care. 

The blueprint also included a call for the elimination of “gag clauses.”  “Gag clauses” are contract provisions that can be used to subject pharmacists to penalties if they let patients know when certain prescription drugs would cost less if paying out-of-pocket rather than through their insurance plan.

On September 17, the Senate passed S. 2554, the Patient Right to Know Drug Prices Act by an overwhelmingly bipartisan vote of 98-2.  This legislation would prohibit the use of “gag clauses” in contracts for employer-sponsored and individual health insurance plans.  On September 25, the U.S. House of Representatives passed S. 2554 unanimously.        

Passage of the Patient Right to Know Drug Prices Act follows the Senate’s September 4 unanimous passage of S. 2553, the Know the Lowest Price Act.  This legislation, which compliments S. 2554, would prohibit a prescription drug plan under Medicare or Medicare Advantage from restricting a pharmacy from informing an enrollee of any difference between the price, copayment or coinsurance of a drug under the plan and a lower price of the drug without health-insurance coverage.  The House also passed S. 2553 unanimously on September 25.  On October 11, President Donald J. Trump signed both S. 2553 and S. 2554 into law. 

The non-partisan Congressional Research Service took a look at how much the U.S. spends on prescription drugs and reported that based on data from the National Health Expenditures (NHE) accounts, “the United States spent $328.6 billion on prescription drugs in 2016 and a forecast $338.1 billion in 2017.”  Further, CRS found, “National estimates vary for a number of reasons, including assumptions about the dollar value of rebates that pharmaceutical manufacturers provide to health payers, as well as the value of coupons offered to consumers, and whether the forecasts include both retail and institutional use.  However, the different studies show a trend toward higher spending in recent years.”  

When expressing strong support for efforts to reduce out-of-pocket costs related to prescription drugs, the AARP emphasized, “A report in the Journal of the American Medical Association found that about 25 percent of the time, patients paid more for their prescription using insurance than the cash price of the medicine.” 

Enactment of this legislation will help address high prescription drug costs by enabling pharmacists to more freely share pricing information with patients.  The bottom line is that Americans should not be driven to bankruptcy because of excessive prescriptions drug costs.  I look forward to furthering commonsense changes that ensure pricing transparency so that patients can make informed health decisions.  

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