There’s no question that Americans are hurting from the high price of prescription drugs, including many Utahns. Congress is considering reforms that could finally bring down these prices, but they face fierce opposition from Big Pharma. Opponents of reform claim that most Americans don’t want Medicare to be able to negotiate lower drug prices, yet poll after poll shows the opposite is true.
A recent AARP survey found that 87% of registered voters 50 plus support allowing Medicare to negotiate with drug companies. Right now, the program is largely stuck paying whatever price pharmaceutical companies demand – leaving the government on the hook for sky-high costs that increase every year. Other recent polls support negotiation.
We know this is a problem here in Utah. A Utah-specific survey of people 45 and older found more than one-third (38%) of Utah residents reported that, at some point in the past two years, they decided not to fill a prescription due to the cost. This can mean going without needed medicines, cutting pills in half and even having to make the excruciating choice between paying rent or utility bills, buying food and paying for life-saving prescriptions, whose prices continue to skyrocket.
It’s no wonder that older adults worry about the cost of prescription drugs. AARP has tracked price trends for nearly two decades, and our research consistently finds that the prices for brand name medications most often used by seniors are increasing much faster than prices for other goods and services. Our newest Rx Price Watch Report looked at specialty drugs that treat complex, chronic conditions and found that the average cost to use one of these drugs for a year was $84,442 in 2020. That’s nearly three times the average annual income of someone on Medicare.
Congress is currently considering a bold proposal that would dramatically reduce drug price increases, by simply allowing Medicare to negotiate the prices it pays for prescription drugs.
The good news is that bills currently before Congress would save both seniors and taxpayers billions of dollars on prescription drugs — and ensure that Americans are paying fair prices for the medications we need. It’s outrageous that we pay three times what people in other countries pay for the same medicine.
Every year, Medicare spends more than $129 billion on prescription drugs. Yet it’s prohibited by law from using its buying power to negotiate with drug companies to get lower prices. Giving Medicare the power to negotiate will save taxpayers and people on Medicare $117 billion over ten years and lower prescription drug costs for all Americans.
Consider this: In just under a decade, almost 70% of drug companies increased their annual profit margins while patients faced double-digit price increases. AARP’s most recent Rx Price Watch Report found that the prices of 260 widely used brand-name medications rose more than twice as fast as general inflation in 2020 — in the middle of a global pandemic and financial downturn. Americans now spend over $360 billion per year on prescription drugs.
The federal government continues to play an outsized role in prescription drug research and development. In fact, most of the important new drugs introduced over the past 60 years were developed with the aid of research conducted in the public sector. By allowing the program to use its considerable buying power to negotiate, both seniors and taxpayers could see significantly lower costs.
We, the consumers, pay for the high prices for prescription drugs, regardless of whether we’re taking them ourselves. In addition to co-pays at the pharmacy counter, we pay for medication costs through our insurance premiums and taxes that fund government programs like the Veterans Administration, Medicare and Medicaid.
It’s simply not right that Americans are paying the highest prices in the world for our prescription drugs, and we simply can’t wait any longer for affordable prescription drugs.
Alan Ormsby | director, AARP Utah
Alan Ormsby is the Utah state director of AARP.