The New Year kicked off with average price increases of 5.9 percent on 620 prescription drugs — 605 brand-name and 15 generic. This hardly bodes well for the prospects of significant price relief in the year ahead.
Introduction
Prospects for significant price relief on prescription drugs in 2020 were hardly brightened when the New Year opened with a round of price hikes on more than 600 drugs, both brand-name and generic. This is especially discouraging in the face of multiple pledges by elected officials at both national and state levels to take action to slow prescription drug price hikes.
According to data from GoodRx.com, price hikes averaging 5.9 percent had been announced on 620 prescription drugs as of January 29, 2020. Among those 620 drugs were 605 branded medications and 15 generics. Prices for the brand-name drugs rose by an average of 5.2 percent, while the generics soared an average of 38 percent.
The good news, if any, on the erectile dysfunction drug front is that the second half of 2019 brought a fair amount of price relief, particularly for generic ED medications. With ED drug prices already lower than they’ve been in some time, significant further easing is unlikely soon.
This blog post will revisit the outlook for prescription drug price relief in 2020, with particular emphasis on price trends among ED medications.
What factors are responsible for the increasingly gloomy outlook for prescription drug price relief in the year ahead? We’ll take a look at several reasons 2020 might not bring a halt to the sharp upward trend in drug prices that’s been underway for several years now.
1. It’s an Election Year, Stupid
An election year might seem the ideal time to curry favor with voters by taking steps to halt the uptrend in drug prices. However, that overlooks another stark political reality. Big Pharma has big pockets, and it’s keeping a close eye on what elected officials say and do — but mostly do — to keep drugmakers in check on the price front.
While playing lip service to the need to act on prescription drug prices, politicians are unlikely to undertake any meaningful reforms until after the presidential election, which means nothing significant is likely to happen before 2021.
The primary lobbying group for the drug industry is the Pharmaceutical Research & Manufacturers of America, or PhRMA. According to a CNN report, PhRMA spent a record $27.5 million on lobbying activities in 2018. But that only scratches the surface of drug industry lobbying.
CNN cites a report from OpenSecrets indicating that individual companies and special interest groups within the drug industry spent an additional $194.3 million as of October 24, 2018. This is spending over and above the lobbying expenditures of PhRMA. OpenSecrets, according to CNN, is “a nonpartisan, independent research group tracking money in U.S. politics.
And as important an election year as 2018 was, this year is going to be even more significant. A hard-fought battle for the presidency will certainly top the headlines, but 2020 will also witness political skirmishes to fill key seats in the U.S. Senate and all 435 seats in the U.S. House of Representatives.
The candidates most likely to win favor among prescription drug manufacturers are those who are least vocal in their call for prescription drug price reform.
2. Current Bills Going Nowhere
As proof of their earnest efforts to bring prescription drug prices under control, the House of Representatives and Senate have proposed bills that promise concrete steps to halt the uptrend in drug prices. Sadly, most such bills are stalled somewhere in the halls of Congress.
Among those bills are S. 102, known formally as the Prescription Drug Price Relief Act of 2019. It was introduced by Sen. Bernie Sanders in January 2019 and has gone nowhere since.
Yet another well-meaning piece of legislation seemingly lost in the shuffle is H.R. 3, also known as the Elijah E. Cummings Lower Drug Costs Now Act, which passed the House in December 2019 and was sent to the Senate where it is likely to languish.
Still another bill is S. 2543, known as the Prescription Drug Pricing Reduction Act of 2019, which was reported out of a Republican-chaired Senate committee in September 2019. Among other things, the bill would lower prescription drug prices in Medicare and Medicaid programs. Skopos Labs, which evaluates the outlook for legislation, gives it a 10 percent chance of enactment, according to GovTrack.us.
3. Plenty of Smoke, No Fire
Trump administration pledges to tackle skyrocketing drug prices have come primarily from the Department of Health and Human Services and its secretary, Alex Azar. According to HealthAffairs.org, Azar “placed drug pricing at the forefront of his policy agenda in 2018 with the release of the administration’s drug pricing blueprint, but he made little to no progress on the topic in 2019. . . .”
An administration proposal to reform Medicare Part D coverage and prices was first floated in 2018, but by the middle of 2019, the proposal was walked back. In February 2019, the administration offered a proposal to reform Medicare Part D’s drug rebate system, but that proposal died at mid-year.
4. The Blame Game
The middlemen in the prescription drug distribution chain, pharmacy benefit managers (PBMs) manage prescription drug benefits for health insurers, large employers, and Medicare Part D players, among others.
Because they represent hundreds of thousands of insureds as well as major companies, PBMs are able to negotiate rebates and discounts from drugmakers in return for favored placement on the PBMs’ formularies.
In theory, PBMs are supposed to be able to save consumers money on prescription drugs by passing their negotiated discounts and rebates on to the insureds they represent. In practice, that may not always happen.
In April 2019 testimony before the Senate Finance Committee, executives of major PBMs placed the blame for high drug prices on the prescription drug industry, according to USATodayNetwork.com. They also denied claims that PBMs had failed to pass on to consumers the rebates they got from drug manufacturers.
5. ED Drug Prices Are Already Low
Hopes for lower prices for ED drugs, both brand-name and generic, are minimized by the fact that most of these prices moved lower during the second half of 2019, leaving little room for further reductions.
Average prices for all but one of the Big Three ED medications — Viagra, Cialis, and Levitra — and their generic alternatives fell between July 2019 and January 2020. The sole exception was Viagra, which rose less than 1 percent from $79.28 per 100 mg tablet in July 2019 to $79.93 in January 2020. The average price for 100 mg sildenafil dropped 31.9 percent from $33.56 in July to $22.85 in January.
The average price for 20 mg Cialis edged 4.2 percent lower from $78.06 in July 2019 to $74.75 in January 2020. The drop in the average price of 20 mg tadalafil was even greater, falling 52.1 percent from $37.60 in July to $18.01 in January.
The average price for Levitra 20 mg fell 14.1 percent from $62.98 in July 2019 to $54.13 in January 2020. A 56 percent decline was observed in the average price for 20 mg vardenafil, falling from $48.88 in July to $21.51 in January.
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When comparing drug prices from one retailer to another, it’s helpful to consider the “total cost of ownership,” which includes not just the price of the drug but all other costs involved in actually obtaining the drug. This might include a visit to the doctor’s office to get a prescription, trips to and from the local pharmacy to get that prescription filled, plus any time you might have to spend waiting during these processes.
If you adopt this approach to the costs involved in getting your drugs, you might very well find that ordering your ED drugs online from eDrugstore.com can save you both time and money. No more trips to the pharmacy, and shipping is free. Best of all, you can skip a trip to your doctor’s office by taking advantage of eDrugstore’s complimentary online consultation service, which will match you up with a physician licensed to practice in your state. If the doctor finds that you’re an appropriate candidate for an ED drug, he or she will authorize a prescription. To learn more, visit eDrugstore’s Erectile Dysfunction page.
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