Reed's SPIKE Act pushes for transparent prescription drug costs
WASHINGTON, D.C. - It’s a reality for millions of Americans: the rising cost of prescription drugs. In some cases, brand name drugs now cost nearly 100 times their original value. That drastic sticker shock is catching the eyes some lawmakers on Capitol Hill, including Congressman Tom Reed.
Earlier this month, Reed introduced the SPIKE (Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act of 2019.
The average older American takes between 4 to 5 prescription drugs each day.
But for some, following doctor’s orders is now getting to the point where it could break the bank.
“There are people who are having to choose between taking their prescription drugs and paying for things like groceries and rent,” said Leigh Purvis, Director of Health Services Research at the American Association of Retired Persons (AARP) Public Policy Institute, Washington, D.C.
Those decisions driven in large part by the spike in prescription drug prices over the last decade, according to Purvis. She and analysts at AARP found brand name drugs jumped an average of nearly $5,000 from 2006-2017. But if priced at the rate of inflation during that same time period, that increase would’ve been significantly less, around $500.
That has led Reed and a bipartisan group of lawmakers to introduce their legislation, which centers around one specific goal: clarity.
“We’ll hold them accountable by bringing transparency to their price increases,” Reed said.
The bill would require pharmaceutical companies to release more information about why drug prices are set so high, and why they are increasing so rapidly.
“That sort of information is going to be incredibly helpful because right now we really have absolutely no idea how manufacturers set their prices or decide to increase them,” Purvis said.
The spike in prescription drug costs affects all Americans because some programs are taxpayer funded, such as Medicare and Medicaid, Purvis added. In short: the more those prices increase, the more everyone pays.
“If you can get costs going down, you can get insurance premiums going down. So, this is a step in the right direction,” said Reed.
If a drug price increases by more than 10 percent or $10,000 over one year, 25 percent or $25,000 over three years,or costs more than $26,000 at its launch, Reed’s proposal would require the drug companies to report their reasoning to the department of health and human services.However, it’s unclear whether the feds could reject those price hikes.
If approved, the SPIKE Act would take effect in 2021.