By Jennifer Sweet
Now that the state Legislature is back in session, there is no better time for New Jersey to meaningfully address one of the most significant financial challenges our residents face today — the exorbitant cost of prescription drugs.
High drug prices impact all New Jerseyans. However, it hurts low-income families, seniors, and those with chronic health conditions the most.
This problem has been growing for years and demands substantive action. Since the beginning of the year, drugmakers have raised prices by an average of 6.6%, and this is no outlier. From 2007 to 2018, the list price of brand-name drugs increased by 159%, or 60% net price accounting for manufacturer discounts.
People in New Jersey are worried and hurting. Nearly 60% are somewhat or very concerned about affording prescription medication, and one in five adults that live in N.J. report not filling a prescription, cutting a dose in half, or skipping it altogether to make their medicine last longer. That is tragic, unacceptable, and dangerous.
To address this, Assemblyman John McKeon and I have sponsored S329/A1747 that establishes a Prescription Drug Affordability Board (PDAB) to protect against excessive drug pricing and bring much-needed transparency and accountability to pharmaceutical company’s pricing structures.
The PDAB would analyze drugs that present an affordability challenge for New Jerseyans and issue a report and recommendations to the Legislature. The information would include setting drug upper payment limits for broad-based relief instead of price caps, which only shift costs to consumers via higher insurance premiums.
The PDAB must comprehensively review the entire prescription supply chain and all relevant actors. To this end, the PDAB would hold public hearings, engage in fact-finding, and transparently make all decisions.
Whatever action we take, we must ensure savings go to patients rather than being shifted to increase costs for employers, taxpayers, insurers, and health care consumers.
Pharmaceutical manufacturers have lodged their criticisms of the bill, citing the cost of research and development, but their complaints warrant more scrutiny. Analysis shows large, brand-name drug companies could lose $1 trillion in annual sales and still be the most profitable industry sector. A congressional report also revealed these same companies spend more on stock buybacks, dividends, and executive compensation than research and development.
This reaction from the pharmaceutical industry is just another reason we need this comprehensive solution to excessive drug prices. The PDAB would make pharmaceutical companies’ price-setting more transparent to the public, and lawmakers would have the knowledge to address the issue and bring relief to consumers.
This policy is the most effective solution available and enables us to reduce drug prices across the state. It’s no wonder that New Jerseyans overwhelmingly approve of it – 84% of voters across party lines support the establishment of a PDAB.
Recently, the Assembly Financial Institutions and Insurance Committee voted to advance A1747. I strongly urge my Senate colleagues to take swift action so we can send it to the Governor’s desk.
Every day of inaction by the Legislature is another day where someone skips a dose or cuts a pill in half to save money.
Plus, prescription drugs don’t work if people can’t afford them.
Sen. Troy Singleton is the Senate Majority Whip and represents the 7th Legislative District.