Prescription drug prices in the United States are the highest in the world — by far. Californians on Nov. 8 have a chance to stand up to the pharmaceutical industry’s greed and spark a national movement to end this price-gouging.
Today, no laws prevent drug companies from doubling or tripling prices. So they just do it. The most recent flagrant example is the emergency allergy injection, EpiPen. Its maker, Mylan, jacked up the price of this 40-year-old medication by 461% between 2007 and 2015. During that same period, compensation for Mylan’s CEO rose 671%. And that’s just one company and one drug.
Proposition 61, the California Drug Price Relief Act, would bar the state from paying more than the U.S. Department of Veterans Affairs does for the same drugs. That would include medicine purchased for state employees and retirees, university students, prison inmates, uninsured people with HIV/AIDS and Californians covered by the public insurance program Medi-Cal.
The VA pays an estimated 24% less for drugs than most government agencies and about 40% less than Medicare Part D. Those are significant savings. In California, Proposition 61 would make drugs more affordable and accessible for about 6 million people.
The soaring cost of medicine is a major health crisis nationwide. One out of five Americans age 19 to 64 cannot afford their prescriptions. Hundreds of thousands of seniors cut their pills in half to stretch one month’s prescription into two. Many of those patients will get sicker and some will die. Meanwhile, the five largest drug companies made more than $50 billion in profits last year. The top 10 CEOs in the industry received a total of more than $327 million in compensation.
How have pharma companies gotten away with such avarice? They currently have 1,266 lobbyists on their payrolls in Washington, D.C., and 118 fighting for their priorities in Sacramento. They’ve made hundreds of millions in campaign contributions to politicians. And just this year, massive pharma lobbying efforts killed two bills in the heavily Democratic California Legislature that would have made modest steps toward drug-pricing transparency.
Now, drugmakers are using their cash and clout to try to defeat Proposition 61. Incredibly, the measure’s opponents are prepared to spend up to $100 million in California to make sure that Americans continue paying the highest drug prices in the world. Why? A major pharmaceutical industry publication has called Proposition 61 “ground zero” in the fight against high drug prices, and warned drug company executives that “adoption of VA pricing by the state of California would be a ‘pricing disaster’ for the entire U.S. drug industry.”
Their TV ads have mostly featured veterans who lament that if Proposition 61 passes the drug industry will raise the prices it charges the VA. Not true.
As the former chairman of the Senate Veterans' Affairs Committee, I would never support a measure that harms our veterans. Pharmaceutical companies cannot unilaterally raise the prices of drugs it sells to the VA. The most the VA pays for a drug is either the best commercial price minus discounts and rebates, or the average price paid by pharmacies minus a large discount, whichever is lower. Those price caps are set in law. The VA also receives additional discounts if drug prices rise faster than general inflation. In other words, drug companies cannot just jack up the cost of drugs it sells to the VA.
In addition, veterans’ drug co-payments are fixed and do not rise even if drug prices go up. It is also important to note that veterans being treated for any condition related to their military service pay no out-of-pocket costs whatsoever for prescription drugs.
The drug industry also argues that less than 20% of Californians will benefit from Proposition 61. In fact, the measure will provide relief to all Californians whose tax dollars pay for the drugs used to treat many Medi-Cal recipients and state employees. Taxpayers would save an estimated $1 billion a year.
It’s unacceptable that the exact drugs that we buy in our country are sold in Canada, Britain and other countries for a fraction of the price. My urgent message is to vote yes on Proposition 61 to make medicine more affordable in California and send a signal to Washington that the whole nation’s prescription drug policies need an overhaul.