Big Pharma needs price cost checkup

Pharmaceutical companies need an intervention to address their addiction to prescription drug price gouging. Californians should demand more transparency in drug pricing and put an end to industry practices that state Sen. Ed Hernandez says benefit Big Pharma at taxpayers’ expense.

The West Covina Democrat has the answer. SB 17 would require companies to give 90 days notice before raising the price for medications and to provide detailed accounting of the money Californians spend on prescription drugs.

The bill should breeze through the Legislature and the governor’s office. But with Big Pharma and its army of lobbyists, nothing comes easy.

Hernandez’s bill passed the Senate Health Committee Wednesday and goes next to the Senate Appropriations Committee. Hernandez pulled a similar bill last year when the industry convinced the Assembly Appropriations Committee to gut the reporting requirements. Consumers to weigh in with their representatives to ward off Big Pharma’s intense lobbying this time.

Pharmaceutical companies deserve a reasonable return for their substantial investments in research and development of drugs. But “reasonable” isn’t enough for them when there’s a potential to gouge consumers for medicines they need to stay alive.

Americans spend nearly $400 billion a year on prescription drugs. The average American now pays more than $850 a year, compared with $400 per person in most other industrialized nations.

Big Pharma tends to jack up prescription drug prices by about 10 percent a year with no public warning or justification. The extreme example of price gouging is EpiPen, the injection containing epinephrine — a life and death need for people allergic to bee stings. It climbed from $100 for a two-pack in 2009 to more than $600 in 2016.

That’s the point behind Hernandez’s legislation. The pharmaceutical industry opposes having to explain the timing and reasons for their price increases.

In addition to 90 days notice for a substantial price hike, Hernandez’s bill would require the industry to provide an annual list of the 25 most frequently prescribed drugs in California and the 25 most expensive drugs.

President Donald Trump promised during his campaign to lower prescription drug costs, but don’t hold your breath. The GOP health care bill that died in Congress contained nothing about drug prices, and Trump’s choice to head the Federal and Drug Administration is a former Big Pharma consultant. So much for draining the swamp.

Given the evidence of capricious price increases, drug companies should have to explain why the price Californians pay for prescription drugs is reasonable. SB 17 will bring needed transparency to that process without putting an undue burden on pharmaceutical companies.