Our Representatives Report: Senate Hearing on Rising Drug Costs Hints at Worse Prices Ahead

It’s been clear for some time that the skyrocketing price of prescription drugs is a major problem for thousands of Washingtonians whom rely upon these drugs, we now understand it is an issue for all Washington taxpayers as these costs are significantly impacting the state budget.

“The state has an increased cost of hundreds of millions of dollars associated exclusively with increased drug costs this year alone,” said the sponsor of Senate Bill 6471, Sen. Kevin Ranker, D-Orcas Island. “This isn’t just a problem for individuals, it’s a problem for all taxpayers in Washington state.”

Ranker’s bill would require pharmaceutical companies to make their pricing as transparent as the pricing in other sectors of the health care industry by reporting a breakdown of those costs to the state Health Care Authority. The goal is to identify the reasons for the costs and to provide assurance that Washingtonians aren’t paying more than they should for the drugs.

“Profit is not a bad thing; some of the profit has been used to develop products in areas where the companies aren’t going to make a profit,” Ranker said. “But the important thing is to get a handle on the cause of the increases and identify ways to keep costs down.”

Sydney Smith Svara, executive director of the Association of Washington Health Care Plans, testified to the extent of the problem.

Prescription drugs isn’t just one of the components that make up the overall cost of premiums, it’s the fastest and most dramatically growing,” she said. “When we look at overall drug trends, we see that the largest trend is in specialty drugs, which require special handling, and the number of people using these drugs is increasing.” For people with a bleeding disorder, she said, for example, the drugs can cost $425,000 a year.

Amber Bronnum of the Group Health Cooperative offered a grim warning. “Should the current trend in drug prices continue, by 2018 we expect our prescription drug costs to outpace our inpatient hospital costs, becoming the top cost driver in our system,” Bronnum said. “This isn’t due to utilization; the majority of the increase in cost is due to the cost per drug going up.”