EDITORIAL: It’s time to remove the barriers to lower drug prices

May 02-- May 2--Second of two parts:

Florida is Ground Zero for issues that affect senior citizens.

High on that list is the cost of prescription drugs, an issue that even affects those covered by Medicare.

In fact, a national survey of likely voters ages 50 and up conducted by the AARP found:

--72 percent are concerned about the cost of their medications.

--63 percent say the cost of prescription drugs is unreasonable.

--90 percent support allowing Medicare to negotiate for drug prices.

--40 percent said they have not filled a prescription medication due to cost.

AARP supports allowing both Medicare and individual states to:

--Negotiate on drug prices.

--Have the ability to crack down on outrageous prices increases.

--Cap out-of-pocket costs for consumers.

--Preserve state pharmacy assistance programs.

--Stop loopholes that keep lower-cost generic drugs out of the market.

One of those loopholes is called "pay for delay," an incredible intrusion into the free market. Drug makers pay makers of generics to keep the drugs out of the market and to maintain high prices. The Federal Trade Commission reports that these deals result in Americans paying $3.5 billion in higher drug costs each year.

PolitiFact found that before a generic drug goes to market, brand-name companies can take a number of practices to delay it, such as suing for patent infringement.

"Often the companies decide to settle," PolitiFact reported, "with the generic manufacturer agreeing to hold off on marketing a drug until a certain date in exchange for some form of compensation from the brand-name company -- a 'reverse payment agreement' -- because rather than seeking damages, they agree to compensate the company they sued."

Exchanges of cash are less common today since they appear to be blatant examples of antitrust laws. Rather, the exchanges more likely involve sharing knowledge or marketing.

Democratic Sen. Amy Klobuchar, a presidential candidate, said she would end this practice. Klobuchar and Republican Sen. Charles Grassley, chairman of the Senate Finance Committee, have introduced a bill to end pay-for-delay; it would ban not just cash but "anything of value."

As the AARP noted in a news release, so many industries today are being hit with competition -- retail, mass media, banking and brokerage -- but pharmaceuticals have "maintained a moat around pricing."

At issue is the $1,200 for prescription drugs that Americans pay each year, far more than people in other developed nations.

Pharmaceuticals argue that the prices in the U.S. pay for innovation. However, as reported by CNBC, a new study in the journal Health Affairs debunks that "paying for innovation" contention: it found that research and development accounts for just 17 percent of total spending of most large drug companies.

In many cases, high prices have more to do with current drugs, not new ones.

A University of Pittsburgh study looked at wholesale prices of about 27,000 medications.

Drug makers respond that these studies reflect list prices, not rebates or insurance discounts. But then Joe Average Consumer is often confused by the process, which makes it all but impossible to shop for discounts.

Consumers rightly feel they are being cheated by a rigged market.

In 2014, for example, the list price of Lantus -- a brand of insulin -- increased by nearly 50 percent even though the average price consumers paid had decreased, CNBC reported.

Then there are the middle men who are not passing along savings to consumers.

Besides the uninsured, many Americans are affected by insurance plans with high deductibles and co-pays.

The University of Pittsburgh study suggested capping price increases for pharmaceutical drugs at some "reasonable level."

Certainly, giving the government control of prices should be a last resort.

A better solution would be to simply allow more negotiation and competition in the prescription drug market.

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