Patients Need Drug Pricing Reform Now
The start of the new year saw a new round of prescription drug price increases across the country. The prices of more than 250 drugs rose an average of 6.3 percent. Many other treatments have since posted increases, including many top-selling medications needed to wean people off addictive drugs. In the midst of a national opioid crisis, these opportunistic price increases are alarming.
These price increases are not only unjustified, they adversely impact consumers, forcing at times painful choices between medicine and food or shelter. As the president recently mentioned in his State of the Union address, addressing rising drug prices continues to be a top priority for the administration, and while progress has been made, there is more to be done.
For Ascension, one of the largest non-profit health systems in the United States, the inability to reign in drug prices harms our ability to serve patients efficiently. In the past four years, our national health system alone has experienced a 34 percent cumulative increase in drug costs. While we seek to mitigate the impact of these increases, the frequency of price increases and the inability to negotiate consistent, long-term contracts with manufacturers create significant uncertainty and administrative burden. We experience the greatest number of increases in the months of January and July – when we can see upwards of several hundred or thousand product price increases.
Our supply chain cannot push back on these increases. While we have seen the positive impact that competition and appropriate negotiating leverage can have on prices in similar product areas, such as the device market, we cannot gain that leverage over pharmaceutical products. In medical devices, we have negotiated aggressively and been able to reduce prices over time. In the prescription drug market, however, there is an overabundance of sole-source products on which manufacturers have almost no incentive to offer negotiated price concessions or other contracting accommodations to providers. They simply demand higher prices, and for the benefit of our patients, we must pay them.
Ascension believes that market-based drug pricing reform should continue to be a top priority for this Congress. Given the current realities of the prescription drug market, which suffers from a lack of competition and an imbalance of negotiating leverage, hospitals and other purchasers stand to benefit from federal efforts that adjust for market failures to create a more appropriately level playing field. We therefore support policies that seek to inject more competition and transparency into this critical marketplace, such as disclosing the true research and development costs for drugs; expediting the entry of additional market entrants; eliminating schemes, like pay for delay, that artificially exclude competition; and stopping the manipulation of information that manufacturers are required to provide to generic manufacturers that can speed the development of competitive products.
I applaud the House Oversight & Government Reform and Ways & Means Committees and Senate Finance Committee for already holding hearings on this vital issue. As Rep. Elijah Cummings (D-MD) has said, the administration and Congress have the same goals and there are opportunities to work together on bipartisan solutions to this complex issue.
We urge Congress to focus on policy options that will meaningfully impact drug prices; increase competition and transparency; and increase overall healthcare access and affordability. This would allow Ascension and our colleagues across the healthcare industry to create a healthcare system that is truly patient centered.
Nick Ragone, Chief Marketing and Communications Officer for Ascension, a leading Catholic and non-profit health system
