Last week, the U.S. House of Representatives took an important step in advancing House Bill 3 (H.R. 3), the “Lower Drug Costs Now Act of 2019,” by moving the bill through its first key committee. We at Blue Shield of California support H.R. 3, a bill that would help reduce the cost of essential prescription drugs.
Addressing the rising cost of prescription drugs, which accounts for 23 cents of every health care dollar,i is central to ensuring affordability for our members - and for the entire health care system. Today, the United States pays the highest prices in the world for prescription drugsii due to a number of factors:
- Drug pricing is based on maximizing manufacturers’ revenue without regard to access and affordability.iii
- Drug price increases are generally not tied to any change in value.iv In the market for prescription drugs, manufacturers consistently price their products without any relation to the cost of development or the value relative to other alternatives.
- Drug manufacturers consistently manipulate and abuse the patent system to extend the life of their monopoly far beyond what was considered by Congress.v
- States and other payers in the health care market are limited by federal law in our collective ability to address the widespread market failures that have led to out-of-control drug costs.
According to the Congressional Budget Office, H.R. 3 would reduce—by nearly 55 percent—the prices for the first group of drugs subject to negotiation under the bill.vi This includes drugs used to treat critical chronic conditions like rheumatoid arthritis and diabetes, which are among the highest drug costs that Americans face, year after year.
It is incumbent on Congress to take action and restore some measure of market-driven pricing by passing H.R. 3. We believe H.R. 3 is an essential step to reducing health care costs for Americans.
Blue Shield has been a consistent advocate for lowering the cost of prescription drugs. In California, we supported Senate Bill 17, the nation’s first drug-transparency law. We also are providing physicians with real-time information about the cost of drugs and clinical equivalents at the point of prescribing through our Gemini tool. Blue Shield is also a member of the Campaign for Sustainable Drug Pricing (CSRxP), a coalition of hospitals, doctors, employers, insurers and other stakeholders, who support legislative action to reduce the cost of drugs.
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i AHIP, Where Does Your Health Care Dollar Go, May 22, 2018.
ii The Commonwealth Fund, Paying for Prescription Drugs Around the World: Why Is the U.S. an Outlier?, October 5, 2017.
iii United States Senate Committee on Finance, Wyden-Grassley Sovaldi Investigation Finds Revenue-Driven Pricing Strategy Behind $84,000 Hepatitis Drug, December 1, 2015.
iv Institute for Clinical and Economic Review (ICER), Unsupported Price Increase Report, October 8, 2019.
v I-MAK, Over Patented and Overpriced: How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving Up Drug Prices.
vi CBO Score of H.R. 3, October 11, 2019.