Guest Editorial: Drug companies are killing us with high prices
For more than four decades, well-meaning members of Congress of both parties have attempted to introduce competition into the prescription drug monopoly and for 40 years, they've been stymied and stone-walled by the powerful drug companies and their lobbyists.
Minnesota Democratic Sen. Amy Klobuchar and Iowa Republican Sen. Charles Grassley have mounted another campaign with a proposal to prohibit pay-for-delay deals between drug companies that keep competitively priced general drugs and new medicines off the market.
In pay-for-delay deals, drug companies trying to prevent competition pay generic drug makers to delay introduction of the cheaper generics. It's a preposterous anti-competitive practice that should be an affront to anyone who calls themself a capitalist.
Klobuchar and Grassley announced introduction of a bipartisan bill Wednesday to kill pay-for-delay deals not only for generics but also for the fast-growing, more expensive products known as biologics and biosimilars.
Klobuchar, who is the ranking member of the Senate Judiciary Subcommittee on Antitrust Competition Policy and Consumer Rights, and Grassley, the chairman of the Senate Judiciary Committee, pose a powerful bipartisan partnership, but one that, because drug companies also have bipartisan backers, will need to overcome significant odds.
The Congressional Budget Office has estimated prohibiting pay-for-delay deals will save taxpayers $2.9 billion.
Drug companies often argue they need these protections and high prices because the cost of developing new life-saving drugs is high. They argue they will not be able to provide these drugs if their revenues are reduced.
The average pharmaceutical or biotech company has net profit margins of 12.5 to 14 percent, according to a study by New York University's Stern School of Business. But many make much higher margins: Gilead Sciences and Amgen have profit margins between 35 and 45 percent.
Klobuchar has been leading the crusade against other non-competitive practices. She spearheaded bipartisan legislation with the late GOP Sen. John McCain to allow imported drugs from Canada that meet U.S. safety standards, but are often one-third the cost of U.S. drugs. The common-sense legislation has been stymied since the 1990s when GOP Rep. Gil Gutknecht of Minnesota's 1st District championed the cause.
Klobuchar has garnered the support of 34 senators to co-sponsor her bill to allow Medicare, covering 41 million Americans, to simply be able to negotiate with drug companies for better prices. It is currently illegal for the government to negotiate prescription drug prices in Medicare on behalf of the people. No luck, as Big Pharma quashed the idea.
Progress has been slow, but there is hope for a reluctant Congress to begin taking on big drug companies.
Another bipartisan bill sponsored by Klobuchar and Grassley would "address abuses and delay tactics that prevent generic companies from performing the necessary testing and distribution necessary for U.S. Food and Drug Administration approval," according to a Klobuchar news release.
The Congressional Budget Office said that bill would save $4 billion. The bill passed the Senate Judiciary Committee in June on a solid bipartisan 16-5 vote.
Grassley described the impact of the newest proposal in a statement: "Competition is critical to keep prescription drug prices low. Generics and biosimilar drugs are critical to treating a variety of serious illnesses. Our bill will curb the anti-competitive, pay-for-delay tactics that artificially inflate prices for patients."
With President Donald Trump saying drug companies are "getting away with murder" in their prices, it's time for Congress to pass these common sense, market-based reforms that will bring competition to drug pricing and lower costs for all taxpayers.
The remaining congressional holdouts must hear from their constituents. We urge all Americans to contact their representatives and senators to push for these important changes.