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Opinion

A Civic Duty to Address Drug Costs

A recent series of events tells us a lot about the state of health care in America today: Major nonprofit organizations, business leaders and former top federal officials are all stepping up to confront our broken health care system that costs too much, fails us and is unavailable to many. It is not a coincidence bold actions are happening now; we face a yawning gap of health care leadership in Washington and a failure of the Trump Administration to keep its promises.

Last month, a coalition of seven American hospital systems and three national foundations, alarmed by rising prices and shortages of critical generic drugs, launched a not-for-profit generic drug company, Civica Rx, to push back and take some control over the pharmaceutical supply. In hopes of increasing competition and lowering prices, the company will focus on establishing price transparency and stable supplies for 14 generic drugs. As a nonprofit, the company will not be beholden to dividends or stock prices. And unlike any pharma company I’m aware of, its CEO is working without pay.

Earlier this year, Amazon, Berkshire Hathaway and JPMorgan Chase joined forces to launch a new health care company that aims to lower their rising health costs for their more than 1 million employees – costs described by Berkshire Hathaway CEO and Chairman Warren Buffett as “a hungry tapeworm on the American economy.”

Meanwhile, an array of former federal officials, policymakers and other public figures from both political parties, fed up with partisan warfare over health care, have formed an organization called United States of Care that will push for solutions that can overcome the partisan divide in the nation’s capital.

“The reality is that there are tons of details that almost everyone agrees on, we just don’t focus on them,” said Andy Slavitt, a former top health official in the Obama administration who leads the group. “Public sentiment is fairly well unified in ways that Washington isn’t.”

As laudable as these initiatives are, they are also a symptom of failure. To fix the $3.3 trillion quandary that is America’s health care system – with its spiraling costs, opaque pricing and lack of accessibility to services for millions – we need vision, leadership and courage from the White House and Congress that is willing to take on special interests. Right now, that is lacking.

Take drug prices, for example. During the presidential campaign, President Donald Trump repeatedly promised to leverage Medicare’s purchasing power to rein in runaway drug costs. Allowing Medicare to seek lower prices is a no-brainer. As the single largest payer for health care in the United States, Medicare is the gateway to a vast marketplace of more than 42 million people who happen to be the highest consumers of pharmaceuticals.

But when Trump released his long-promised plan to lower drug prices this spring, a requirement for Medicare to negotiate directly with pharmaceutical companies was nowhere to be found. Despite all of the president’s rhetoric and promises, pharmaceutical companies and their lobbyists won and seniors and the disabled lost.  

Since then, Trump has promised that big drug companies would announce “voluntary massive price cuts.” Nonetheless, many companies have either frozen their prices or raised them substantially.

It is inspiring to see innovation and commitment bubbling up outside of Washington as leaders in the business and nonprofit sectors strive to heal what ails our sick health care system. But in the end, the profound changes we need will only come when voters make clear to the president and both parties that the government must act courageously in the face of monied special interests. It must lead.

 

Shelley Lyford is a board member of Civica Rx and president and chief executive officer of the San Diego-based Gary and Mary West Foundation, a nonprofit, nonpartisan organization dedicated to lowering health care costs and enabling successful aging for our nation’s seniors.

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