SUMMARY: With supplier costs rising, companies representing some of the biggest brands are urging Congress to address drug pricing. According to STAT News, “groups representing the largest businesses in the country, including Walmart, Tesla, Apple, Microsoft, IBM, Boeing, and The Walt Disney Company, have demanded wide-reaching reforms to help lower the cost of prescription drugs”.
Costs on just about all products are rising, and consumers are taking notice. Supply chain management is becoming a hot skill for many companies, but they’re also looking to reduce employee healthcare costs, and they’re looking at the high price of prescription drugs.
Big pharma is trying its best to fend off price controls for Medicare with considerable donations to politicians. Sen. Kyrsten Sinema, the controversial Arizona Democrat who threatens to derail President Biden’s legislative agenda, received more than $750,000 in grants from the pharmaceutical and medical device industries. After that, she announced her opposition to a Democratic plan to lower prescription drug costs.
Americans spend twice as much per capita on drugs as residents of other wealthy nations,because we are the only country that lets drugmakers set any price they want for their products. Industry-friendly laws then oblige the largest public U.S. programs to pay for nearly all costly products the companies offer — a situation radically different from the nation’s other public procurement programs. As a result, we spend nearly 1 in 7 of our health-care dollars on prescription drugs.
Pharma is fighting a losing battle to delay the inevitable. Seventy-nine percent of Americans think the price of prescription drugs is “unreasonable,” according to a 2019 Kaiser Family Foundation poll, and 9 in 10 say they support the idea of the government negotiating prices. This would seem to make the policy a natural fit for a party that has made healthcare reform a signature issue in recent years. But the three lawmakers’ stance is probably explained by the scale of pharmaceutical spending to block reform. According to the Center for Responsive Politics, pharmaceutical and health-products industries spent $309 million on lobbying in 2020, placing it at No. 1 in lobbying expenditures among industry groups — with double the spending of the No. 2 group. The same year, the industry spent $89 million on well-focused campaign contributions. That trend has continued, with $171 million in lobbying expenditures so far this year and generous campaign contributions targeting key members of Congress. Peters alone received checks written by drug industry CEOs and lobbyists totaling $19,600 within two days of his opposing a price-negotiation plan in May.
However, perhaps the most prominent challenger to high drug prices are consumer product companies who have seen their healthcare costs rise by double digits year after year. As of 2019, the total annual medical costs for employees were just over 13 thousand U.S. dollars.
Companies are fighting back both politically and with the implementation and testing of new approaches to health. Some employers are offering their people free telehealth, and Amazon may be expanding its telehealth efforts. With a lower cost per visit than traditional office visits and more comfort and safety for patients and providers alike, using telemedicine for common colds, ailments, dermatology, and therapy, can save employers and employees time and money
But that still leaves prescription drugs. Numerous studies have debunked pharma’s talking point that Medicare price controls would hurt innovation, and voters aren’t buying it. While PhRMA is spending a ton of many lobbying, you can bet those big companies will spend a lot to counter pharma’s sending. They have investors, too, and know that pharma’s ROI is the highest of ANY industry.
Intelligent CEOs understand that change IS coming and are on the wrong side of what the public wants. Pfizer’s CEO said that his company’s response to COVID was proof of innovation. Still, in reality, a COVID vaccine has been in development for over ten years, and Pfizer is making billions.
Pharma is alienating voters and other industries by refusing to give up its healthy profits. You can be sure that wall is going to crumble.