News of the Day: US GAO finds "extraordinary" increases in drug prices

A report by the General Accountability Office today says that it found "extraordinary price increases" in brand-name drugs. Those increases put an additional burden on sick and struggling families.

According to Reuters:

Prices for hundreds of brand-name drugs have soared since the beginning of the decade, especially those that treat depression, infections and heart disease, according to a U.S. government report on Monday.

The nonpartisan General Accountability Office said it found "extraordinary price increases" for 321 brand-name drugs, with prices jumping by 100 percent to 499 percent -- and in a few cases by more than 1,000 percent.

The number of drug price increases more than doubled from 2000 to 2008 with most drugs maintaining their higher prices over time, the investigative arm of Congress said.

The Affordable Health Care for America Act has multiple provisions to protect consumers and taxpayers from rapid drug price increase.

For consumers, the Affordable Health Care for America Act:

• closes the Part D donut hole by $500 in 2010 and eliminates the donut hole entirely by 2019. This protects seniors by ending the gaps in coverage that force them to pay the full cost of their drugs. For patients who are able to switch to lower-cost generic drugs, H.R. 3962 clarifies that Part D plans can offer a free generic prescription fill when a Part D enrollee switches to the generic.
• requires the Secretary of the Department of Health and Human Services (HHS) to negotiate with Part D manufacturers for lower prices, providing new leverage to help control Part D drug price increases.
• requires new transparency in drug pricing for plans in the Exchange that use pharmaceutical benefit managers (PBMs). This will reduce waste, fraud, and abuse and give patients more information about drug prices and spending.

For taxpayers, the Affordable Health Care for America Act:

• expands and increases the Medicaid drug rebate, which requires that manufacturers pay a rebate to cover cost increases that exceed the inflation rate. These payments will protect taxpayers from price increases that occur before or after the health care reform legislation goes into effect.
• contains new Part D rebates that help cut the cost of providing drugs for dually eligible and low-income enrollees. These Part D rebates are based on the Medicaid rebates. They will save taxpayers billions of dollars each year.

These reforms of health insurance are only a few of the many benefits for consumers and taxpayers. We encourage you to read the GAO report, learn more about how H.R. 3962 controls drug prices and improves Medicare Part D, or more about H.R. 3926, the Affordable Health Care for America Act.