Health Care

Sanders aide urges transparency on drug prices

The House Health Care Committee is looking for ways to bring down the cost of prescription drugs.

The committee took testimony Wednesday on a bill that would require state health care regulators to collect information from prescription drug manufacturers on what drives their prices.

Chris Pearson

Rep. Chris Pearson, P-Burlington, is vice chair of the House Health Care Committee. File photo by Erin Mansfield/VTDigger

Proponents say the bill, H.866, would force pharmaceutical companies to release information they never have before. Once regulators have the information in hand, supporters hope, they could use it to drive down prices.

Vermont is one of a handful of states, including New York, California, Massachusetts and Minnesota, to consider such a law. Rep. Chris Pearson, P-Burlington, has taken the lead on the bill and says he hopes to put pressure on Congress to do something about drug prices.

The House Health Care Committee voted H.866 out of committee. The bill was scheduled to go to a floor vote last week before Rep. Bill Lippert, D-Hinesburg, the committee chair, pulled it back in for more testimony.

The bill may evolve and head back to the floor, Lippert said. The committee is also considering whether to add the bill’s language to legislation regarding prescription drug formularies, S.216, which the Senate recently passed and sent over to the House.

That bill would require health insurance companies in Vermont to provide information on what drugs their enrollees can buy and how much each drug will cost enrollees, among other things.

Kathryn Becker Van Haste, an aide to U.S. Sen. Bernie Sanders, I-Vt., testified Wednesday. She said pharmaceutical companies have the highest profit margins in any industry in the world while 1 in 5 Americans can’t afford to fill their prescriptions.

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Sanders introduced a bill in Congress, the Prescription Drug Affordability Act, that would require pharmaceutical companies to disclose how they derive their prices.

“We do see that transparency in pricing is a really important first step in trying to bring down prices,” Van Haste said. “The price you pay for a particular medication varies by insurance company. It also depends on where you go and have it filled. There’s not much else in our economy that is quite like that.”

The United States pays the highest prices in the world for prescription drugs, according to Van Haste, and has limited consumer protections with regard to drug prices. Canada pays the second-highest prices, equal to about 40 percent of what the United States pays, she said.

In 2014, Johnson & Johnson spent $8.2 billion on research and development and $17.5 billion on marketing, but brought in $71.3 billion in revenue and had a 19 percent profit margin, Van Haste said. The same year, Pfizer had a 43 percent profit margin, she said.

“It is an uphill battle,” Van Haste said. “I think that largely the pharmaceutical companies have not been open to this. They have largely considered their prices to be part of their proprietary information, and so I think court challenges would probably be expected by any state that made this attempt.”

Pearson said the committee would craft a strong bill to limit the state’s exposure to lawsuits. But he said threats of lawsuits would not stop the committee from bringing a bill regarding prescription drug prices to the floor.

“Every time you try to take on a massive industry like pharma, they tell you about their impressive legal staff,” Pearson said. “It’s obviously a consideration. It’s something we’re trying to better understand.”

While Van Haste was before the committee, Lippert held up a copy of an advertisement he received in the mail. The ad was for a “global” pharmaceutical company that said it could help him get Lipitor, a cholesterol medication, for $60 as opposed to the $399 sticker price in the United States.

“I’m not in any way endorsing this,” Lippert said, “but I think that it highlights (the problem). When we have commercials marketing to us, saying, ‘Why should you be paying more?’ it can’t be more explicit or blatant than that.”

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Erin Mansfield

About Erin

Erin Mansfield covers health care and business for VTDigger. From 2013 to 2015, she wrote for the Rutland Herald and Times Argus. Erin holds a B.A. in Economics and Spanish from the State University of New York at Stony Brook, where she also attended journalism school. Erin has worked in public and private schools across Vermont and interned in the U.S. Senate. She has been published by the Columbia Journalism Review and the Society of Professional Journalists. She grew up in Killington.

Email: [email protected]

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