Today, Medicare covers prescription drug costs for millions of seniors. Medicare pays whatever price pharmaceutical companies charge for their drugs, because Congress forbids Medicare from negotiating drug prices. Now, Senator Amy Klobuchar (D-Minn) has introduced a bill that would empower Medicare to reduce drug prices.
Why Are Drug Prices So High?
The price of prescription drugs has been rising rapidly in large part because there is no free market for drugs. The FDA approves drugs based on select evidence of their effectiveness, without knowing their price or how effective they are as compared with other drugs that are already on the market. By patenting a drug, a pharmaceutical company has monopoly power to set its price for as long as the company can keep it patented. Doctors are free to prescribe these drugs regardless of their clinical benefits or costs. And Congress requires Medicare to cover them, even without evidence of their clinical benefits relative to less costly drugs on the market.
How Can Legislation Lower Drug Prices?
Klobuchar’s bill is aimed at introducing some competition into the prescription drug marketplace through Medicare drug price negotiation.
It’s not Klobuchar’s first effort to deal with the high costs of drugs. In early 2017, the senator introduced legislation with John McCain to allow people to import drugs safely from Canada. She has also introduced bipartisan legislation with Senator Charles Grassley that would stop Pharma from paying generic drug companies to delay manufacture of their lower-cost drugs—what’s known as “pay for delay.” And she has introduced bipartisan legislation with Senator Mike Lee, Creating and Restoring Equal Access to Equivalent Samples (CREATES), to allow drug companies to sell drugs in the US that they have sold abroad for at least 10 years when there is little or no competition for the drug in the US.
Thirty-one senators are cosponsoring Klobuchar’s Medicare drug price negotiation bill, including Chuck Schumer, Patty Murray and Tammy Baldwin.
If you want Congress to rein in drug prices, you can sign this petition.