Every day, Utahns are bombarded with glitzy, and sometimes confusing, advertisements for pharma drugs. The ads paint a rosy picture for patients along with a list of side effects, but they leave out one important detail—price.
That’s probably because the costs of many of these prescription drugs are shockingly high. And they’re only getting worse. The price of four of the top ten prescription medications on the market increased by over 100 percent since 2011. The cost of the world’s best-selling drug, Humira, rose 248 percent in the past six years. And Wellbutrin, a leading antidepressant, is up 596 percent in only five years. Something’s wrong with that.
These price hikes are causing a crisis in health care spending, for families, businesses and government. Already, more than 23 cents of every Utah healthcare dollar goes to prescription drugs and pharmaceutical spending is growing faster than any other part of our health care budget.
This is what happens when costs are hidden, kickbacks unfairly favor certain products and comparison shopping is discouraged. While these factors have distorted the pharmaceutical market, our state officials are preparing to address the problem head-on.
A new proposal in the Utah Legislature would require drug makers to provide physicians with drug price information, so they can work with patients to identify the treatments delivering the best value. The plan would also eliminate the direct incentives drug makers use to steer doctors to more expensive drugs. Finally, it would remove barriers preventing affordable generic drugs from reaching patients. This solution would enhance competition, and open and honest pricing would incentivize drug makers to offer products at more reasonable prices. Passing such a law can’t happen fast enough.
Unfortunately, drug companies have responded to this proposal by backing initiatives that would do nothing to lower drug prices, and instead, just create more unnecessary paperwork and government bureaucracy. Our lawmakers need to understand that in order to lower drug prices, they need to focus on solutions that will make a difference for Utah’s patients and their families, rather than just create more unnecessary government.
Right now, out-of-control prescription drug costs are driving up health insurance costs statewide. Small businesses are being forced to choose between supplying an employee health plan or creating jobs. Pharmaceutical-fueled premium increases are also hampering business investment. While the economy has been on an upswing, these impacts could be devastating whenever the next market correction occurs.
Constantly escalating prescription drug costs are also eating away at wage increases. Many businesses are spending more than ever on employee compensation packages, including health insurance, but their workers may actually take home the same or less. The trend is challenging families’ efforts to make ends meet, let alone save for retirement, education or just a rainy day.
Allowing patients to suffer unnecessarily because of pharmaceutical companies’ price gouging is unethical. It’s also economically harmful. Lack of treatment leads to uncontrolled symptoms, which increase employee absenteeism, compromises productivity, and in worse case scenarios, leads to severe complications and disability that remove talented people from the workforce altogether.
Businesses recognize the importance of affordable health care, including prescription drugs. To ensure Utah has a solid workforce, to accelerate job creation and wage growth, and to keep families healthy and financially stable, we must fix prescription drug pricing.
Our legislators are on the right track, avoiding the pitfalls of government price controls in favor of smart changes. If they can pass market-based solutions to lower drug prices, Utah is headed for a healthier, more prosperous future.
Greg Summerhays is the President and CEO of the Sandy Area Chamber of Commerce.