U.S. residents pay outrageously high prices for their prescription drugs. According to the online magazine The Hill, “Americans pay prices for prescription drugs that are two to six times the rest of the world, despite having personal incomes that are on par with many developed countries.”
In fact, even though we constitute only 5 percent of the world’s population, international pharmaceutical companies realize about 60 percent of their total profits from within the United States, as reported in The Atlantic.
One reason for this alarming situation is that the federal government, notwithstanding the agencies that represent our men and women in the armed forces and veterans, does not negotiate the price of prescription drugs with manufacturers. In fact, when the government finally established the Medicare prescription drug program in 2004, the Republican-controlled Congress wrote “non-negotiable” pricing into that law. Congressman Billy Tauzin of Louisiana, who helped write this groundbreaking piece of legislation, resigned his seat in the House of Representatives to take a reported seven-figure salary lobbying for the pharmaceutical industry while negotiations were still underway. The ban on negotiating is also a shortcoming of the Affordable Care Act.
Senior citizens living on fixed incomes are among those acutely conscious of the rising costs of prescription drugs. As reported in the October issue of the AARP Bulletin, a survey of Maryland members showed that 77 percent of Maryland seniors listed “curbing prescription costs” as one of their top three issues. According to the AARP, “name-brand and specialty drug prices are rising at a faster pace than other health care spending, and almost 10 times greater than the rate of inflation.”
Since drug prices continue to skyrocket, who can Marylanders turn to for relief? Apparently not Gov. Larry Hogan, as Luke Broadwater reported in The Sun a few weeks ago. According to his reporting, “officials with the state’s Democratic Party released documents they said show Hogan and the Republican Governors Association — which has been running attack ads against Jealous — are cozy with big pharmaceutical companies.” Hogan’s Democratic opponent, Democrat Ben Jealous, meanwhile, has taken no contributions from Big Pharma, any other corporations or PACs/Super PACs.
Since the national Republican Party and our governor are disinclined to rein in drug prices, Marylanders hoping for relief with the bills they pay at the pharmacy should take a closer look at Democrat Ben Jealous’ health care strategy.
Among the health care proposals on his website, Mr. Jealous calls for the establishment of a Prescription Drug Affordability Board that would determine the maximum allowed cost of medication in Maryland.
The board’s goal would be to “ensure that everyone, from those on Medicaid to those with private insurance, can get a good deal [by forcing] manufacturers to deal in good faith with the state.” The candidate points out that “a bill to implement this was designed by the National Academy for State Health Policy and supported by 23 Senators and 78 Delegates here in Maryland, just short of a majority” in 2018. Maryland’s current governor did not support that legislation.
Curbing pharmaceutical prices is one element of Mr. Jealous’ larger health care objective. He plans to bring Medicare for all, or single payer health insurance, to our state.
His critics, and especially the Republican Governor’s Association in its television attack ads, have labeled this goal as too radical for Maryland. But is it really? As he points out, “Since 1977, Maryland has had a waiver from the federal government known as ‘All Payer’ that ensures everyone, whether on Medicare, Medicaid or private insurance, pays the same rate in Maryland hospitals.”
During the 2018 legislative session, retiring Delegate Dr. Dan Morhaim secured passage of new legislation that can save the state a fortune by integrating all Maryland state employees — state, city, county and local; teachers, troopers and others — into a very large, single integrated insurance pool. That legislation also holds open the door for non-profit organizations to join the state insurance pool.
Still other factors commend the Jealous health system. The existing Medicare system for seniors carries an overhead of 3 percent of total costs, while our large corporate insurance programs run at 16-18 percent. Presumably Maryland’s single payer system would operate with similar competitive economies.
Faced with four more years of rising insurance, medication and other health care costs in a second Hogan administration, Marylanders would do well to take a close look at the Jealous plan. Their health and financial well being may depend on a majority of Marylanders casting their votes for Ben Jealous, who could save them a bundle on health care.
John Leith-Tetrault is retired from the National Trust for Historic Preservation where he specialized in economic development and historic property finance. His email is email@example.com.