AFL-CIO Executive Council Takes on Excessive Prescription Drug Prices

Are you upset by prescription drug prices that are way too high?

Many working people are. And they’re frustrated by federal and state lawmakers’ failure to do anything about it.

This week, the AFL-CIO Executive Council called on policymakers to make dealing with excessive drug prices a top priority. Noting that Americans already pay the highest drug prices in the world, the Executive Council argued: “To make sure drug prices are fair, we need to change the rules that give drug companies unchecked monopoly rights.”

Spending on prescription drugs keeps going up and up, driving premiums in working people’s health plans higher and higher and making patients pay more and more out of pocket at the pharmacy counter. In 2014, the last year for which actual numbers are available, national spending on prescription drugs purchased through retail pharmacies jumped 12.2%, far more than workers’ wages or inflation.

There is not just one thing behind this surge that’s resulted in a typical family of four, with workplace health coverage, spending more than $3,900 a year on pharmacy costs. A lot of publicity has been given to ultra-expensive medicines (sometimes called specialty drugs), like those for hepatitis C or some cancer treatments that can cost $85,000 or more for one course of treatment. Likewise, many people are aware of the extreme examples of companies jacking prices up, like Daraprim, the drug to treat a parasitic infection, the price for which was increased from $13.50 to $750 per pill overnight.

Less widely known, but equally important, are the big price increases we’ve seen for commonly prescribed drugs. As the AFL-CIO Executive Council noted: “The makers of brand drugs raised net prices for 27 major drugs by 25% or more between 2009–2015, with the discounted price of one diabetes drug more than tripling.” There are even examples of generic drug prices spiking. According to AARP, one generic antibiotic rose from $20 per 500 pills to $1,849 from 2013–2014.

Then, there are the companies that take advantage of the loosely written government rules for granting drug developers monopoly rights in order to keep prices high for long periods of time. For example, the maker of a commonly used cholesterol medication is trying to extend its monopoly rights for all purposes by proving that the drug is also effective in fighting a rare disease that affects children.

To deal with the untenable drug price situation, the AFL-CIO Executive Council is calling for big changes, including:

  • Government drug price negotiation on behalf of all payers—including working people and their health plans.
  • Real leverage for the government in those negotiations when agreement on a reasonable price can’t be reached, such as through a system of binding arbitration or exercise of existing government authority to use a patented drug.
  • Changes to address unfair or abusive practices, such as when companies try to block generics coming to market.
  • Stopping trade agreements like the Trans-Pacific Partnership that expand monopoly rights for drug companies.
  • Requiring drugs developed with government funding to be sold at fair prices.
  • And exploring alternative ways—instead of high prices for patients—to pay for drug innovations.

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