Kelly Says No to Prescription for Lower Drug Prices

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     “This government price-fixing scheme would lead to the development of fewer new cures and reduce access to existing life-saving drugs.” From Mike Kelly’s statement opposing the Elijah E. Cummings Lower Drug Costs Now Act, Dec. 12, 2019.

 

     So Kelly, a member of a party that preaches the beauty of the free market, doesn’t like it when some of his donors have to negotiate their prices? Is that really a “scheme”? Isn’t it all part of a free-market system?

 

     And he contends being paid less for some drugs would cause pharmaceutical companies to curtail research and development of new ones. Are they this cash-strapped that addressing our country’s high drug costs would be this destructive to the public good?

 

     Let’s see.

 

     Republicans passed the Tax Cuts and Jobs Act in 2017, which provided big tax cuts for corporations, like the drug companies. Axios reported that in 2018, the year the law went into full effect, the 12 largest American pharmaceutical companies spent more money buying back their stock than they spent on drug research and development -- $69.1 billion on stock buybacks, with another $47 billion in reserve for future transactions, and $65.9 billion on research and development.

 

     “When billions of dollars became available to the biggest drug companies, their main priority was to juice earnings, along with the paydays of their executives and investors -- not investments in new treatments or relief for patients who can't afford their drugs,” the Axios article said.

 

     The tax windfall certainly didn’t lead to lower drug prices to ease the burden on those with limited or no insurance. Kaiser Health News reported that in 2019, 4,311 prescription drugs experienced price hikes averaging about 21 percent, while 619 drugs had price dips, and so far in 2020, 2,519 drugs have increased prices at an average of 6.9 percent, and 70 had their prices go down.

 

     Trump has falsely claimed otherwise.

 

     During his State of the Union Address in February, the president said, “I was pleased to announce last year that, for the first time in 51 years, the cost of prescription drugs actually went down,”

 

     Politifact rates this mostly false, saying that in reality “the continued drug pricing trend suggests that prices may be stabilizing, but they are not coming down. And consumers are not experiencing that relief.”

 

     As far as fewer drugs being developed, the CBO estimated that the bill would result in 40 fewer drugs over the next two decades (an average of two per year). Democrats said the result would be fewer copycat versions of existing drugs, rather than preventing development of new ones.

 

     Democrats also countered that their bill addresses research and development concerns by allocating more than $10 billion to the National Institutes of Health for biomedical research, with the goal of advancing breakthrough cures.

 

     While Kelly expressed concern about the drug companies having to be paid negotiated rates, it should be noted that these figures won’t be just pulled out of a hat. The bill ties that amount to what the companies charge in other countries, which in some occasions is much lower than in the United States.

 

     For instance, the Ways and Means Committee report looked at the cost of seven insulin drugs in 2018. The cost in the United States ranged from $26.95 to $82.74. The average in the other countries ranged from $6.75 to $16.37.

 

     The prices of drugs in other developed countries will be used as a reference point to ensure that negotiations result in a price that’s no more than 1.2 times the average price in six other places. In other words, drug companies won’t be forced to sell for less than the average price, they just won’t be able to gouge American consumers.

 

     In opposing H.R. 3, Kelly made the usual bogus Republican talking points – claiming socialism and accusing the Democrats of playing politics.

 

     Really? Lower drug prices based on negotiation is socialism? Helping people who are now forced to decide whether to buy their medications or food is playing politics?

 

     Kelly pushed a Republican bill, H.R 19, of which he was an original co-sponsor, as the answer.

 

     The New York Times reported that this measure – wait for it – excludes the Medicare negotiation provision.

 

     Again, Kelly received $231,000 in campaign contributions from drug companies during his political career, according to Kaiser Health News.

 

     Sources:

 

     House Democrats pass broad prescription drug price bill as election marker. Washington Post. (Dec. 12, 2019)

     House Votes to Give the Government the Power to Negotiate Drug Prices. New York Times, Dec. 12, 2019.

     The House just passed an ambitious bill to lower prescription drug prices. Vox, Dec. 12, 2019.

     Pharma Cash to Congress. Kaiser Health News, March 23, 2020.

     Kelly: Democrats Making Subscription Drug Policy About Politics, Not People, Dec. 12, 2019.

     On Drug Pricing, The President’s Numbers are Still Off. Kaiser Health News/Politifact, Feb. 5, 2020.

     Big Pharma is on a stock buyback spree. Axios, March 5, 2020.

     Ways and Means Committee Report on International Drug Pricing. U.S. House of Representatives Ways and Means Committee, Sept. 23, 2019.

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