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Fayette County


The War on Drug Pricing

Jack Bernard, a retired SVP with a large national healthcare firm, has worked extensively with hospitals across the nation regarding cost containment and insurance. He was also the first Director of Health Planning for Georgia.
Jack Bernard, a retired SVP with a large national healthcare firm, has worked extensively with hospitals across the nation regarding cost containment and insurance. He was also the first Director of Health Planning for the state of Georgia.

Lowering pharmaceutical costs was a major positive Trump campaign pledge that has gone absolutely nowhere. We pay much more than other nations for our drugs. With a 208 percent increase in pricing from 2008-2016, pharmaceutical price escalation is out of control and a key factor in driving up the cost of insurance.
In 1996, I was a VP with American Health Systems (AmHS), an alliance of 1,100 hospitals which then had arguably the lowest drug pricing for hospitals in the USA. I approached the four western Canadian Provincial Hospital Associations about joining the alliance. I then supervised a very comprehensive analysis of comparative drug prices.
Even though our purchasing volume was many times theirs, their pharmaceutical pricing was so much lower than ours that it was embarrassing for us. We went home with our tails between our legs.
For this reason, I was pleased to see that Premier (the successor to AmHS) , this summer issued nine policy suggestions to create a more level playing field when it comes to pharmaceuticals. Among the recommendations: 1. speed FDA approval times; 2. outlaw “pay to play”; 3. put a lid on pricing of “orphan drugs’’; and 4. halt frivolous petitions delaying market entry (google these terms for details). This is an excellent start.
In retirement, I am now a health reform activist and an AARP member. In May, AARP also came out with a number of recommendations to moderate drug price escalation : “1.Let Medicare negotiate drug prices; 2. Allow more drugs to be imported; 3. Create transparencies in drug pricing; 4. Provide for easier drug comparisons; 5. Implement value based pricing.”
As a nation, we should be examining what other developed countries are doing in order to keep their drug costs, as well as health care costs in general, so much lower than ours. There is no doubt that the technical quality of our medicine is superior to many nations. But, there is also absolutely no doubt that we are by far the most expensive per capita. For example, our per capita health care cost is over $9,000 and Italy is one third of that figure.
The Commonwealth Fund has issued “International Health Care Systems Profiles,” a comprehensive report comparing health care in a variety of developed nations. The results are startling. They contradict the USA politicians who say that we have the best healthcare in the world, using the criteria of access, quality and cost.
Along these lines, via our excessive drug prices, we seem to be paying for R and D costs for all of the other nations, which benefit from new drugs but do not pay the freight for their development.
Further, Congress is unable to agree on many healthcare issues, as evidenced by the recent failure of healthcare insurance reform. Drug pricing is no exception.
Not only do the Democrats and Republicans disagree, there is also significant disagreement within each party as to how aggressive a role the government should have in protecting the public and healthcare providers from price gouging. No doubt, the tens of millions of dollars in campaign contributions by Big Pharma have had a chilling impact on objectively addressing the problem.
As AARP points out, President Trump stated during his campaign that drug pricing was outrageous and that it would be addressed when he became President. As is true with many of his “put America first” promises, there has been no forward movement on this topic.
For once, our elected representatives must put our interests ahead of special interests. We need to establish a bi-partisan Congressional study committee to determine why drug costs in other nations are so much less than ours. This committee can then come back and recommend specific actions to Congress. Then, hopefully, out President will sign legislation that really does put the citizens of America first, rather than Big Pharma.