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The Fight for Lower Prescription Drug Costs

Bob Edwards takes a look at the fight against rising prescription drug costs and the effects on seniors

Take on Today Podcast


Bob Edwards: Hello, I'm Bob Edwards with an AARP Take on Today.

Bob Edwards: Older Americans who rely on Medicare Part D, prescription drug coverage, take an average of four and a half prescription drugs, and are hit particularly hard by any rising costs. AARP's most recent prescription price watch report contained a staggering finding. It found that the average price of brand name drugs widely used by older Americans increased at four times the rate of inflation in 2017 alone.

Bob Edwards: Earlier this year Congress took an important step to help reduce the burden older Americans face by passing the Bipartisan Budget Act of 2018. This legislation, thanks to a bipartisan deal, closes the Medicare Part D coverage gap known as the doughnut hole on brand name drugs in 2019. Now, the pharmaceutical industry is taking steps to undo this process.

Bob Edwards: AARP, Patients for Affordable Drugs, and other organizations are working together on a major advocacy campaign. The effort will urge Congress to stand up to the pharmaceutical industry.

Bob Edwards:  Joining me today is Ben Wakana, executive director of Patients for Affordable Drugs, to discuss what's happening in Congress and the fight to protect older Americans from high drug costs. Welcome.

Ben Wakana: Thanks for having me, Bob.

Bob Edwards: Ben, tell me about what your organization is working to accomplish.

Ben Wakana: Patients for Affordable Drugs is the nation's only independent, bipartisan patient organization focused on policies to lower prescription drug prices. We were founded actually by an AARP member, who also happens to have cancer, and he takes about $400,000 worth of prescription drugs every year.

Ben Wakana: Our mission is to elevate patient voices in the discussion around prescription drug prices. We felt like everyone had a voice in Washington except patients, and so we help bring patient voices to the debate around prescription drug prices, and we do that in partnership with people like AARP who is really leading the fight to lower prescription drug prices here in Washington.

Ben Wakana: So that is our mission, and I think we are all aligned in saying we cannot give drug companies this $4 billion bail out that they are currently lobbying for, and we need to put all our resources collectively into the fight to stop this.

Bob Edwards: People are spending up to six figures on prescription drugs?

Ben Wakana: Unfortunately that's not even an uncommon number for people to be spending on prescription drugs. The rise in prescription drug prices, as people know, has been steep, it has been happening for years, and I think our position is “it's time that Washington took action”. And if you look back at the elections in early November, we think that Americans gave Congress a mandate to take action to lower prescription drug prices.

Ben Wakana: The idea that the pharmaceutical lobby's first action after that November election is to go to Capitol Hill with their hands open and say “We need a $4 billion bailout” to us is unconscionable, and that's why we're here today, to try to stop it.

Bob Edwards: Tell us about the Medicare Part D coverage gap, commonly known as the doughnut hole. Why is it called the doughnut hole?

Ben Wakana: It is called the doughnut hole because it is a time in the year when Medicare beneficiaries fall into a coverage gap, where they're paying more out of pocket than they were previously. There are three phases to Medicare, that middle phase is called the doughnut hole.

Ben Wakana: The first phase, people pay their copays, they pay their deductibles, and then most of the cost is picked up by the plan, by taxpayers, etc. Once they spend about $3700 they go into the dreaded coverage gap, where Medicare beneficiaries themselves are on the hook to pay a higher proportion of the cost for every prescription drug they take. And so what that means is that when you see these drugs that are $50,000, $100,000, $150,000, Medicare beneficiaries, even if you're paying 30 percent of that that's still $30,000 on a $100,000 drug. So the doughnut hole is a time in the year when seniors pay more.

Ben Wakana: If I could, and interrupt if I should Bob, let me tell you what the bipartisan deal did and how that was helpful for the beneficiaries, and now what drug companies are trying to do to undo that deal.

Bob Edwards: Sure.

Ben Wakana: So right now, when a senior goes into the doughnut hole, they pay about a third of the cost of their drug. If it's a $100,000 drug, they pay about $30,000, actually they pay 35 percent. Drug companies then give about a 50 percent discount, so beneficiaries pay 35 percent, drug companies give a 50 percent discount on the drug, let's leave the other portion aside.

Ben Wakana: What Congress did is they changed those percentages a little bit, they said, “Drug companies, you're gonna need to give a larger discount, your discount's gonna be 70 percent, and in return Medicare beneficiaries are only gonna have to pay 25 percent of their drug.” So Medicare beneficiaries went from paying 35 percent of the price of every drug they take to only 25 percent next year.

Ben Wakana: We think that's a good deal for Medicare beneficiaries. It saves them out-of-pocket costs, it shifts some of the responsibility for the high cost of drugs from Medicare beneficiaries onto drug companies who, frankly, are making record profits and can afford to bear a slightly greater share of the pie.

Bob Edwards: So is that what Congress did with this bipartisan bill-

Ben Wakana: That is what Congress did on a bipartisan basis, they changed those percentages around. They said, “Seniors are gonna pay a little bit less, drug companies are gonna pay a little bit more.” There's nothing wrong with that, both sides of the aisle agreed to it, the president signed it into law, seniors I think for once got a good deal, and this is a win for seniors, taxpayers, and one of the rare times in Washington when I think drug companies took a loss in a policy debate.

Bob Edwards: Hey, any bipartisan deal seems like pretty good news these days.

Ben Wakana: That's right.

Bob Edwards: And now this deal might be undone?

Ben Wakana: Bob, it is safe to say that the drug industry is swarming Washington right now with lobbyists, with special interest groups who are trying to undo this bipartisan deal and force Medicare beneficiaries to pay more for their drugs so that drug corporations can get a $4 billion windfall. That's the amount of money that, when they change those percentages, went from seniors paying these higher prices to drug companies paying a little bit more for the drugs.

Ben Wakana: So that's the number we're talking about, $4 billion. And if the drug industry is successful in undoing this deal, then it will mean that seniors are paying higher out-of-pocket costs for their drugs, and that drug companies are juicing their profits and increasing their bottom line for shareholders and their CEOs.

Bob Edwards: AARP, Patients for Affordable Drugs, and other organizations recently announced a campaign to protect seniors from high drug costs during the lame duck session of Congress. Tell us about that.

Ben Wakana: I really can't say enough about the effort that AARP has launched, they have a new ad campaign that's out across the country that features patients telling their story about how prescription drug prices have impacted them, and I think it's a great way to educate patients and to let people know that this is an issue that they should know about, that the drug industry would love to squeak this through in the dark of the night. But I think we're only gonna stop it, and we're only gonna keep pressure on drug companies if patients speak out.

Bob Edwards: Let's take a listen to one of the videos from the campaign that features a patient struggling with high drug costs.

Joan Tramontano: I have cancer, and I'm urging Congress to do the right thing for Americans like me. My cancer medicine has cost me $60,000 over the past 10 years. Recently, I decided to stop taking the drug because I simply can't afford it anymore. My medicine is just too expensive. What pharma is doing is not right. They're spending millions to lobby Congress to raise Medicare drug costs. Congress needs to get tough and stand up to drug companies. We seniors have worked hard and paid into Medicare our whole lives, and we don't deserve this. Call Congress. Tell them to lower Medicare drug costs.

Bob Edwards: Ben, we just heard Joan Tramontano's story, she made the gut-wrenching decision to stop taking her cancer drug. How common is that story?

Ben Wakana: Oh, it never ceases to be tragic, and to be devastating that, in the United States of America, people of all ages ... I was working with a woman yesterday, she was a nurse, she said, “I did everything right. I saved for retirement, I put my kids through college, I worked till I was 65. I got cancer when I was 67, and I'm bankrupt now.”

Ben Wakana: That shouldn't be happening in America, and yet it is not ... Joan's story, while tragic, is almost unremarkable in the world we live in today, because drug companies are taking advantage of people, they are taking advantage of the system that they operate in, and frankly they are ripping all of us off, whether we are taxpayers, patients, or seniors.

Ben Wakana: There is a concrete thing that people can do right now to help stop this madness, to help fix our broken system, and that is to say, “Keep this bipartisan deal in place. This is a good deal. It helps seniors, it helps taxpayers, and pharma can afford to pay a little bit more.” And that is what we are encouraging people to do.

Ben Wakana: One more note about Joan, Bob, is that you asked how common this is, and I think it is not at all uncommon for us to hear stories of people cutting their pills in half, skipping doses, going into bankruptcy to afford their prescription drugs. And that is why we felt like it was an important step that Congress took to say, “We're taking action to lower people's prescription drug prices.”

Ben Wakana: Americans in the doughnut hole are gonna pay a little bit less for their prescription drugs. Big pharmaceutical companies who are making record profits and buying back stock at levels not seen in decades are going to pay a little bit more to fill the doughnut hole, the coverage gap. We think that's a fair deal, we think that's a good deal, we think that it should be intact.

Bob Edwards: It seems like pharma has unlimited resources. This campaign is facing a very serious opponent.

Ben Wakana: We are up against a monopoly industry, an industry that hasn't lost a fight in Washington in decades, an industry that is throwing all of its significant lobbyists, special interest groups at this issue to try to extract a $4 billion bailout for drug companies. What we have are people's voices. We have the voices of everyday Americans who did the right thing, who are getting hammered under rising prescription drug prices, and who can make a real difference here.

Ben Wakana: Because I think that, if members of Congress know that Americans are watching this, and that they are unwilling to accept a $4 billion bailout going from seniors' and taxpayers' pockets into the pockets of big pharma, I don't think they'll cut that deal. I think that elected officials understand that constituents are hurting, and I think that they wanna do the right thing. I think they just need to hear from everyday Americans who say, “Do the right thing here. Don't cut a bad deal with big pharma.”

Bob Edwards: A new Congress will be sworn in on January 3rd, 2019. Are you hopeful that members of Congress can work across the aisle to address the high cost of prescription drugs?

Ben Wakana: We are extremely encouraged that this is an issue that is at the top of everyone's to-do list come January of 2019. Come November 17th of 2018, this should be at the top of everyone's to-do list, it should have been for decades, should have been for years.

Ben Wakana: But yes, we are hopeful that this is an issue that Washington will address. I would say the first thing that they should do is not give big pharma this $4 billion bailout. Once we can check that off, then let's move on to additional steps that we can take to lower prescription drug prices. What might those be? I think I would throw out a couple options.

Ben Wakana: One, there is bipartisan legislation sitting on Capitol Hill right now to speed generics to market. Everyone understands that, when there's a brand name drug on the market, once a generic comes on there's increased competition, there's lower prices, and that's a good thing for patients, seniors, and taxpayers. So it's a bill called the CREATES Act, it's cosponsored by democrats, republicans, and so let's get that done and let's get that through and speed generics to market.

Ben Wakana: The second thing I was going to mention was pay-for-delay legislation. As your listeners might know, drug companies in America are granted a monopoly once they bring a drug to market. That monopoly sometimes lasts seven, 10, 12 years. If you invent a new drug, you are granted the exclusive right to manufacture, market, and sell that drug at whatever price you want. And in most instances the government is forced to buy it.

Ben Wakana: What drug companies do is, once they are nearing the end of their exclusivity period, their monopoly, at that seven, 10, 12 year mark, whatever it might be, they cut these side deals with other drug manufacturers to say, “Hey, don't bring your generic drug to market yet, let us pay you a little bit and keep you on the sidelines, and let us keep the monopoly, keep raising prices on patients, and keep reaping these record profits.”

Ben Wakana: We think that that type of behavior is outrageous, it should be stopped, and in many other countries where this behavior is not allowed we see generics coming to market. I'll give you an example. The top-selling drug in the world right now is a drug called Humira, it's made by a company called AbbVie. They have cut numerous what I would call deal-for-delay or pay-for-delay deals, they pay another competitor to keep this drug off the market.

Ben Wakana: In Europe, where their exclusivity period is running out, they are cutting the price of Humira. Again, I'm sure you've heard of Humira because one out of every three ads on television is for this drug, Humira. They have cut the price of Humira in Europe. Meanwhile, the price of Humira in the United States has, we've seen it continually rise and rise and rise, and since there is no generic in sight in the United States, we are not seeing these same price concessions that folks across the ocean are seeing.

Ben Wakana: So that's another area of bipartisan agreement. I'm not the first person to say this, but we operate in a broken system. The system around prescription drugs is broken, it is hurting people, and there are concrete steps that we can take right now to make things better. Number one, don't give drug companies this four billion dollar bailout, number two, pass legislation to speed generics to market, number three, end these outrageous pay-for-delay deals that are blocking competition and distorting the market for prescription drugs.

Bob Edwards: Ben, thank you.

Ben Wakana: Thank you, Bob. It's been great to be here.

Bob Edwards: Here's what else you need to know. Coming from the “you just can't make this stuff up” department is the story of a man who really fell for the artwork in a museum he was visiting in Portugal. No, literally. He fell into a piece of art, which was actually a hole eight feet deep, painted black inside a concrete cube.

Bob Edwards: How exactly this man ignore the posted warning signs at this modern art exhibit, and fell into the hole, is not known. But what looked like just a big black dot on the floor was actually part of artist Anish Kapoor's 1992 work Descent into Limbo. Typical of the British-Indian artist's abstract sculptures, the concrete cube helps create an optical illusion, so that the hole can either look like a bottomless pit, or just a dot painted on the floor. This museum patron obviously made the wrong guess, proving that, when it comes to art, beauty, or rather, black holes, are in the eye of the beholder.

Bob Edwards: For more, visit Become a subscriber. Be sure to rate our podcast on iTunes, Stitcher, and other podcast apps. Thanks for listening. I'm Bob Edwards.

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Older Americans take on average 4.5 prescription drugs a year on a chronic basis, each of which have an average annual cost of $6,800 per drug. Yet, Pharma is taking steps to increase the burden of costs on seniors and open the Medicare Part D Coverage gap also known as the “donut hole.” In this week’s episode of An AARP Take on Today, Bob Edwards chats with Ben Wakana of Patients for Affordable Drugs Now about its work with AARP urging Congress to stand up to the pharmaceutical industry and lower costs.

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