President Joe Biden has assumed the Oval Office, and many voters are now hoping he will address the extremely high cost of life-saving medications. In a letter to the new president, U.S. PIRG joined 25 other nonprofits representing consumers, patients, health care providers, public health experts, union members and faith leaders to call for swift action to address out-of-control prescription drug prices.
The letter urged the president to take “rapid, bold action to deliver relief from prescription drug price gouging, using executive authorities that do not require congressional authorization” and offered to help him by “sharing our knowledge and resources.”
Even before the pandemic led to widespread job losses and increased the health burden on families, Americans struggled to afford their medications. As a result of unaffordable medication, 30 percent of Americans have said they were not taking their medicine as prescribed. The health consequences of splitting pills or not filling prescriptions on time can mean the difference between life and death.
Although Congress debated solutions last year and the House passed a bill, the Senate never passed legislation and high-cost drugs continue to be a life-threatening problem. We’ve seen price gouging for life-saving drugs like insulin and pay-for-delay accusations against biopharmaceutical company AbbVie for blocking generic competition in the U.S. for its best-selling high-cost drug Humira.
Executive actions recommended
The actions we urged the president to take include:
Use federal patent power to increase generic competition
The president could use authority under existing federal laws to help consumers access lower cost drugs. This power was almost used in 2001 when Secretary of Health and Human Services Tommy Thompson announced his desire to help stockpile Cipro, the anthrax antidote. The mere threat of using federal patent power resulted in the Cipro patent holder, Bayer, cutting its price in half for the U.S. government. Our letter urged the president to use this power “to enable state and local authorities to purchase low-price generic naloxone auto injectors to help combat the opioid addiction crisis, or to finally put an end to Humira profiteering.”
Acknowledge the public’s investment in new drugs by establishing a reasonable price requirement
A reasonable pricing requirement would make drugs developed with public money more accessible. Remdesivir, Gilead’s drug to treat hepatitis C and Ebola, offers an example of how this might work. By some accounts, the National Institutes of Health (NIH) invested as much as $6.5 billion over 20 years in research that led to the drug’s development. When Gilead announced its prices as a COVID-19 treatment between $2,340 and $3,120, 11 state treasurers objected, citing the need for reasonable pricing in light of the public investment and the low production cost (it only costs $1 per vial to make while they sell the medicine at $390 to $520 per vial). Europe has implemented a reasonable pricing requirement, defining whether a price is excessive based on production costs, profit margins and economic value.
Use the Federal Trade Commission (FTC) to investigate and prosecute anti-competitive behavior
The president could put a swift end to patent abuses and price gouging by directing stronger action from the executive agency responsible for policing anti-competitive and unfair business practices. In previous decades, FTC enforcement against pay-for-delay activities revealed how much consumers had overpaid for drugs because of brand-name companies paying generic manufacturers to stay out of the market. Those payments effectively extended patents by nearly 17 months, preventing consumers from saving as much as 90 percent off the cost of their medication. By swiftly engaging the FTC’s investigatory and enforcement power, the president would send a clear signal that brand-name drug companies can no longer take advantage of patients.
We stand ready to help the new administration protect Americans from price-gouging by pharmaceutical companies. Americans need lower cost prescription drugs and we can’t afford to wait.
Photo Credit: Laurynas Mereckas, Unsplash
Senior Director, Health Care Campaigns, PIRG
Patricia directs the health care campaign work for U.S. PIRG and provides support to our state offices for state-based health initiatives. Her prior roles include senior policy advisor at NJ Health Care Quality Institute, associate state director at AARP New Jersey and consumer advocate at NJPIRG. She was appointed to the Ground Ambulance and Patient Billing Advisory Committee in 2022 and works with patient advocates across the U.S. Patricia enjoys walking along the Potomac River and sharing her love of books with friends and family around the world.