Medicare drug prices soar at 10 times rate of inflation, report says
The prices of the 20 most commonly prescribed brand-name drugs for seniors have risen nearly 10 times more than the annual rate of inflation over the past five years, according to a congressional report released Monday.
“Can you imagine if you went to an auto dealership and last year’s exact model was being sold at a 20 percent mark-up, and then you went back the next year and it had happened again?” said Sen. Claire McCaskill, D-Missouri, who released the report as part of a years-long investigation into escalating drug prices.
“That’s exactly what’s happening in the prescription drug industry, where the cost of identical drugs skyrockets year after year.”
McCaskill has long taken aim at soaring drug prices, raising questions about why the costs continue to skyrocket even amid congressional investigations.
The new report, called “Manufactured Crisis: How devastating drug price increases are harming America’s seniors,” said the extreme price hikes show the need for further investigation to determine the “impact on healthcare system costs and financial burdens for the growing U.S. senior population.”
“Soaring pharmaceutical drug prices remain a critical concern for patients and policymakers alike,” the report concluded. “Over the last decade, these significant price increases have emerged as a dominant driver of U.S. health care costs — a trend experts anticipate will continue at a rapid pace.”
The report examined the costs of the 20 most-prescribed drugs under the Medicare Part D program from 2012 to 2017. It found that the drug Nitrostat, used to relieve chest pain, had increased the most: a percentage change of 477%.
Zostavax, prescribed for shingles among seniors, had the lowest percentage increase but was still high: 31% over five years.
Twelve of the 20 drugs saw their prices increase by more than 50% over the five-year period and six had price increases of over 100%, the report found.
Although 48 million fewer prescriptions were written for the top 20 most commonly prescribed brand-name drugs from 2012 to 2017, the report found that total sales revenue from these prescriptions increased by almost $8.5 billion during that period.
The Pharmaceutical Research and Manufacturers of America, an industry group that represents leading pharmaceutical companies, sharply criticized the report.
“This is yet another misleading report that ignores the robust negotiation that occurs between Medicare Part D plans, middlemen and biopharmaceutical companies,” Juliet Johnson, a spokeswoman for PhRMA, said in a written statement. “Negotiated rebates can reduce list prices by as much as 30 to 70 percent for medicines used to treat diabetes, high cholesterol, and chronic respiratory illnesses. Notably, half of the 20 brand medicines in this report are used to treat these chronic conditions.
“We agree more can be done to make Part D more affordable and predictable for seniors. One way to do that is to ensure seniors benefit from the significant negotiated savings when they pick up their medicine at the pharmacy.“
By law, Medicare is not allowed to directly negotiate drug prices, which critics say results in the government spending tens of billions of dollars unnecessarily. Democrats have long pushed for Medicare to be able to negotiate on pricing, while Republicans have opposed such measures.
President Trump has hinted at a willingness to break from the GOP on the issue, saying drug prices are too high and telling a crowd in New Hampshire in late January that such a policy would save billions. He took a similar stand in his State of the Union address, telling the nation that his administration wants to “make fixing the injustice of high drug prices one of our top priorities.”
“Prices will come down,” Trump said.
Monday’s report was issued by the minority staff of the Committee on Homeland Security and Governmental Affairs, of which McCaskill is the ranking Democrat.
“This report demonstrates that the pricing decisions made by these drug companies are outrageous — and I’ve never shied away from taking on this massive industry on Missourians’ behalf,” she said.