En español | Members of Congress say they want to lower prescription drug prices but have yet to reach agreement on a piece of legislation. The House of Representatives has passed one bill and a key Senate committee has approved a different measure. Proposals include allowing Medicare to negotiate for lower prices, improving access to generic drugs and establishing penalties for pharmaceutical companies that increase their prices faster than the rate of inflation. Some governors and state legislatures already have passed laws creating affordability review boards, improving drug price transparency, allowing drug importation and setting limits on out-of-pocket costs for specific medications, such as insulin.
The simple reason why prescription drugs are so expensive is that pharmaceutical companies are free to price gouge taxpayers. Unlike many other countries, the United States allows drugmakers to set their own prices with virtually no accountability or transparency.
Pharmaceutical firms annually spend nearly $175 million for lobbying and more than $6 billion on advertising. These companies benefit from billions of dollars of taxpayer-funded research and then charge Americans outrageous prices for the resulting drugs when they reach the market. Drug companies also find ways to extend their monopolies. In addition, Medicare is not allowed to negotiate for lower prices. These factors all explain why big drug companies are among the most profitable businesses and charge the highest brand-name prescription drug prices in the world.
Skyrocketing prices are putting vital prescription drugs out of reach for many Americans age 50-plus. Many people with conditions like cancer, asthma and diabetes are having to choose between paying for their life-saving medicines and other important needs.
High drug prices also increase health insurance premiums, deductibles and cost-sharing for employee-provided health care and taxpayer-funded programs such as Medicare and Medicaid. This translates into higher taxes or cuts to public programs that affect all Americans.
AARP legislative priorities
As you consider a candidate, keep in mind AARP's guiding principles on prescription drug pricing:
- Medicare should be allowed to negotiate prescription drug prices
- Drug prices should not rise faster than inflation
- Medicare Part D prescription drug plans should include a cap on out-of-pocket drug costs
- Prescription-drug price transparency should be increased
- Lower-priced generic drugs should get to market more quickly
- The U.S. should not continue to pay the highest drug prices in the world
For more information, please go to: aarp.org/Election2020