Last March, I quoted the new Health and Human Services (HHS) Secretary, Alex Azar, as saying, “Change is possible, change is necessary, and change is coming.” I hope so. Change is desperately needed. It remains to be seen if the federal government can make the changes needed and make them fast enough. The biggest barrier is Congress. HHS tried to simplify drug insurance last year, and Congress blocked the simplification because it would have been negative for the health insurance industry, one of the powerful lobbies that fuels Congress with donations. The most important thing Azar said as part of the recent address was, “We’re unafraid of disrupting existing arrangements just because they are [controlled by] powerful special interests.”
Medical science has advanced rapidly, but innovation in healthcare payment and delivery systems has been slow. While Blockbuster put local video shops out of business and then Netflix put Blockbuster out of business, the healthcare system of care delivery and administration changed very little. The cost of Medicare has grown from $400 billion in 2001 to trillions, but quality has not grown at the same rate.
One of the priorities Azar outlined for HHS was making healthcare drug pricing more transparent, and this week he took steps to make the promise a reality. While USDA regulations require companies to disclose possible side-effects in TV advertisements, the administration has now stipulated pharmaceutical manufacturers must disclose their list prices in the ad copy as well. The pharmaceutical lobby will argue vehemently against such disclosure, even claiming first amendment rights. In other words, they will argue their right to hide prices should supersede consumer rights to understand the pricing. Pharma would like to keep the pricing impossible to understand. Today, patients and purchasers pay very different amounts for the same medications. They use coupons and rebates to lower the advertised price for patients while simultaneously raising what they charge insurers. The insurers then pass those costs back to consumers through higher premiums. While Congress allows U.S. consumers to pay top dollar prices, pharmaceutical companies offer the same drugs to wealthy European countries at much lower prices. Those countries negotiate aggressively. The U.S. Medicare system is forbidden by Congress from negotiating.
Azar has a list of other actions he plans to take to lower drug prices. The president has said drug prices will drop “Really, Really Substantially”. People go bankrupt or even die because they can’t afford the price of needed drugs. To date, no politician has been willing to stand up to the pharmaceutical lobby. I hope the Secretary and the President have the courage to continue the fight.
Read much more about healthcare and the pharmaceutical industry in Health Attitude: Unraveling and Solving the Complexities of Healthcare.
