The debate over who’s to blame for rising drug prices continues.
America’s Health Insurance Plans (AHIP) launched an advertising campaign Monday that aims to show how health insurers are working to create savings for Americans while also targeting Big Pharma (or more specifically drug manufacturers) for increasing drug costs.
“Manufacturers here are keeping the prices high,” declared Robert Traynham, executive vice president of public affairs and strategic initiatives at AHIP. “I want to be really clear about that. They control the process. The process right now is that they are keeping the prices high. … We are obviously working as hard as we can to negotiate lower prices, but I want to be clear because it’s black and white: this is the manufacturers and Big Pharma.”
The campaign will last through the summer, take a break in August, and then continue again after Labor Day. The ads will be distributed on TV, social media and streaming services, Traynham said.
The advertisements will highlight several stats from AHIP analyses, including that pharmaceutical companies have made more than $18.6 billion in revenues from new prescription drugs over the last 20 years. Another AHIP report found that 22.2 cents of each premium dollar goes to prescription drug expenses.
“[Our goal] is for the prices to come down. … No family member, no American should have to struggle to figure out how to pay for drugs to keep them healthy,” Traynham said.
In response to the campaign, Pharmaceutical Research and Manufacturers of America (PhRMA) released a blog post calling the campaign “misinformation” and instead blamed insurers and PBMs for drug costs.
“Insurance companies use [pharmacy benefit managers] to determine what patients pay at the pharmacy and what medicines are covered,” PhRMA said in the post. “They claim that all they do is negotiate savings for patients, but if that were true, then why are they facing lawsuits, investigations and regulation by state attorneys general, state legislatures, the Federal Trade Commission and United States Congress for their role in rising health care costs?”
Kristine Grow, senior vice president of communications for AHIP, argued that “Big Pharma has for years been pointing the finger of blame at anyone else in the healthcare supply chain but themselves for the very high price of prescription drugs.
“The fact of the matter is the problem has been the price,” she said in an interview. “The problem is the price and the problem continues to be the price especially as you see more and more drugs now being released with multimillion dollar price tags. Every single American pays the price of that cost. There’s no transparency into how they set their prices. There’s no transparency into what makes them raise their prices year after year.”
AHIP has a point. Think back to “pharma bro” Martin Shkreli, who raised the price of the drug Daraprim to $750 from $13.50 per pill in 2015. The Biden Administration has been working to address drug prices, particularly through the Inflation Reduction Act, which caps insulin out-of-pocket spending at $35 per month’s supply under Medicare Part D. Perhaps sensing which way the wind was blowing, several companies voluntarily lowered their insulin prices this year.
But insurers and the PBMs they operate are not exactly blameless and have come under fire from the government recently. Last week, two senators released a framework targeting PBMs. Several House representatives also introduced the Drug Price Transparency in Medicaid Act last month, which would ban spread pricing in Medicaid programs. In January, two senators introduced the Pharmacy Benefit Manager Transparency Act of 2023, which would also ban spread pricing and prohibit PBMs from clawing back reimbursements.
In addition, the Federal Trade Commission launched an investigation into PBMs in June, specifically CVS Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics and MedImpact Healthcare Systems.
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