In a November ballot initiative, California voters take on Big Pharma & sky-high drug prices
by Gaius Publius
Sky-high drug prices are a scandal, but everyone knows that, even those responsible for the prices. They’re also a source of enormous profit and wealth, which is the problem. The drug companies, acting alone and through their lobbying arm, Pharmaceutical Research and Manufacturers of America (PhRMA), are literally sending people to their deaths in order to drain others of a few dollars more. It would not be out of line to call this behavior murderous and psychopathic — in a Martin Shkreli sense — though most would settle for a term from economics. Something related to capitalism, perhaps.
Drug companies and their wealth have captured the national legislative and regulatory process and even some of the national patient advocacy groups (see below for more). How to crack the nut of deadly high drug prices and bring them down to an affordable level? Activists in California are making a very credible attempt at the state level with a November ballot initiative called the Drug Prices Relief Act, or Proposition 61.
Fran Quigley, writing in Truth-Out, first describes the scale of the problem (my emphasis throughout):
It is hard to overstate the level of dysfunction in the US medicines system. The headline-producing greed of “pharma bro” Martin Shkreli was just the most dramatic example of a pharmaceutical industry whose patent monopolies grant it immunity from market forces while its political clout shields it from government regulation. Taking full advantage of taxpayer-funded research, drug corporations make record profits, even by Fortune 500 standards, and pay their CEOs as much as $180 million a year. Those corporations spend far more on incessant marketing to consumers and physicians than they do on research — part of the reason they have largely failed to develop new medicines that address the most deadly illnesses and diseases.
As for the patients who rely on those medicines, pharma lobbying has ensured that the US Medicare program is alone among industrialized nations’ government health plans in not negotiating down the price it pays for medicines, causing US patients to pay far and away the highest global price for necessary drugs. One in every five US cancer patients can’t afford to fill their prescriptions, and many seniors on Medicare are forced to cut their pills in half to stretch their supply. …
The industry’s US trade organization, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, has an annual budget exceeding $200 million, which it directs to the promotion of the image and interests of its 57 member companies. The industry’s US lobbying expenses for 2015 were $238 million, and its campaign contributions have reached as high as $50.7 million in a year. That money has been well-spent.
Even those in government who say they’re trying to help aren’t helping:
Not that the Obama administration has always been a champion of medicine access: the Affordable Care Act enshrined a huge guaranteed market for pharmaceutical companies, and the National Institutes of Health (NIH) recently flat-out refused to exercise its legal right to address huge corporate mark-ups on cancer medicines the NIH helped develop.
I’m shocked about the NIH not using authority it already has to provide relief. That’s a good indication of the extent to which all of national government is captured by this industry.
Only the Veterans Administration, unlike Medicare, negotiates down drug prices. Medicare is forbidden by law to do so. Which makes the prices paid by the VA for prescription drugs an interesting benchmark.
Proposition 61: Marking California drug prices to the VA benchmark
In a nutshell here’s what Prop 61 would do:
The initiative, recently certified by the California Secretary of State as Proposition 61, calls for state agencies to be blocked from paying more for a prescription drug than the price paid by the US Department of Veterans Affairs. Unlike the Medicare program, the VA is free to negotiate the price it pays for drugs and as a result, pays as much as 42 percent less than Medicare and usually significantly lower than state Medicaid programs. The primary force behind the ballot measure, the AIDS Healthcare Foundation, says the law could save Californians hundreds of millions of dollars a year in lower government costs and lower individual co-payments.
Are you a California resident? Imagine a 42% cut in drug prices. (It’s not hard to predict prescription prices falling throughout California if state agencies become the go-to source for low-cost drugs.) That alone, I think, makes Prop 61 worth your active and vigorous support. It would literally change lives, including your own.
Are you a resident of any other state with a ballot initiative option? If Prop 61 passes in California, it will be exported, perhaps to a state near you. Another reason to give Prop 61 your active and vigorous support.
Quigley’s piece has much more information, including some he said-she said about whether Big Pharma is worried about this initiative passing (count on it, regardless of what they say) and whether the ballot measure will deliver the change it advertises (again, count on it, regardless of what its opponents say). I recommend reading it through if this effort interests you at all. It looks very promising to me.
I do want to leave you with one more quote from the article, however, related to those patient advocacy groups who are opposed to Prop 61.
Some patient advocacy groups are opposed; guess why
The opposition is quoting some patient advocacy groups that are opposed to the measure. For example:
While the pharmaceutical industry opposition to the measure is predictable, some patient-connected advocacy organizations have raised concerns as well. Anne Donnelly, policy director for the San Francisco-based HIV and Hepatitis C advocacy group Project Inform, has been widely quoted by the opposition campaign and in media reports questioning the wisdom of the ballot initiative. Donnelly says her group is officially neutral on the referendum and points out that Project Inform supports a drug price transparency bill that is pending at the California state legislature. “We are supportive of the goal of lowering drug prices, but the drug pricing system is so complex that I am not sure this simplistic (ballot) measure is the best approach,” she said in an interview.
But…
Project Inform’s lack of support was highlighted in a July New York Times article on the referendum. But the referendum’s supporters have in turn questioned Project Inform‘s motivations, noting that the organization — like many patient advocacy groups — is funded in significant part by pharmaceutical company donations. “When you look at who is speaking out against the initiative, you have to ask what it is in it for them,” says Burger of the CNA. Donnelly confirms that industry donations make up between 20-36 percent of Project Inform’s budget, but says the organization takes precautions to ensure that the industry does not influence its positions.
Money doesn’t talk, it swears. Or so I hear. Though maybe Ms. Donnelly hears it sing a different tune.
(A version of this piece appeared at Down With Tyranny. GP article archive here.)
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