|President Barack Obama|
President Obama has support for his idea that Medicare needs the power to negotiate drugs prices. The vast majority of consumers think it is a good idea as well.
In a poll from the Kaiser Family Foundation, 87% of consumers said Medicare should be able to seek discounts on prices from drugmakers, Reuters reports. The current results follow on the heels of a survey released by the foundation in June in which 73% of respondents said prescription drug prices were too high and more than 75% placed the blame on drugmakers for setting them too high.
Drugmakers have defended prices with the argument that research is risky and expensive and the prices are needed to cover the cost of finding and developing new drugs that save lives. But consumers don't seem to buy that reasoning, Mollyann Brodie, executive director of public opinion and survey research at the foundation tells Reuters. "People don't understand why these drugs cost so much, and they don't understand why, in America, you can't negotiate for a better price," she said.
The president in his proposed budget called for allowing Medicare Part D the power to negotiate prices "to ensure access to and affordability of these treatments." While there is little expectation that Medicare would win that ability from a Republican-controlled Congress, the new survey data will add to the escalating debate over drugs prices during the current presidential election cycle.
Bernie Sanders, the Independent from Vermont who recently announced his plans to seek the Democratic nomination for president, is already making drug prices an issue. He has targeted to some degree the $1,000 a pill cost of Sovaldi and Harvoni, the hepatitis C treatments from Gilead Sciences ($GILD) that have stirred up much of the drug pricing brouhaha. Sanders in May suggested the Veterans Administration use special wartime powers to break the patent on Sovaldi because the agency was having trouble paying for it.
"Sovaldi got people so up in arms about pricing where you even have Republican members of Congress saying it's ridiculous," said Ipsita Smolinski, managing director of healthcare consulting firm Capitol Street.
While Gilead and its hep C cures have taken much of the heat, Gilead dropped prices for the drugs when a competing treatment from AbbVie ($ABBV) was released last year. And a new report from analysts at Credit Suisse show many of the branded drugmakers have been adding to pricing pressures that have consumers unhappy. Branded drug prices rose more than 12% during the second quarter, year-over-year. The jump of 230 basis points was the largest since the firm started tracking the numbers. Another record was set by the fact that prices went in the second quarter for almost one-third of the top 140 drugs the analysts track. For drugmakers with at least 6 products in that top 140, it was Eli Lilly ($LLY), Pfizer ($PFE) and AbbVie that raised prices the most, at 17.6%, 17.4% and 15.1% respectively. Drugmakers would point out that the data the report tracks does not account for discounts and rebates that they give.
Rising generic drug prices also have caught the attention of consumers, Congress and regulators as well. The Department of Health and Human Services (HHS) has said it intends to investigate the cause of soaring generic drug prices amid congressional concern. And subpoenas and reports indicate the Justice Department is in the midst of a criminal probe of generic drug prices. All of this is likely to feed the rising ire of U.S. consumers over the prices they are paying.
- read the Reuters story
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