The shocking and disappointing medicine increases over the last few years have placed many seniors in a very desperate situation.
When the CEOs of the companies raise these prices with no explanation or by cynically stating that it’s to make more money, it can be hard not to feel cheated and unprotected.
Seniors with low incomes or very tightly controlled financial situations can’t afford to have their live-saving medications denied to them in this way.
However, this problem could change soon if a recent California bill becomes the new standard for the nation.
This law was recently passed by the legislature in the state but has yet to be signed into law. It states that companies who raise their medication prices have to explain these increases.
The Nature of the Law
Democratic Senator Ed Hernandez wrote Senate Bill 17 as a way of helping to set a standard not just for the state of California but the rest of the nation. He indicated that he hoped its benefits would be noted by the remainder of the country.
The basics of the law are that drugmakers would have to tell insurers and government health providers about princes changes at least 60 days before going into effect.
After notifying these officials about the price increase, the company would also have to explain why their prices were going up.
That information would then be published online by the California state government and would be visible by anybody in the rest of the country. In this way, there would be a clear understanding of why drug increases occurred.
However, this doesn’t mean that every single price range must be discussed and explained. The law states that any cost increase that amounts to a 16 percent raise over a two-year period must follow these standards.
Smaller price increases are not subject to these changed guidelines, though changes below 16 percent are not typically financially difficult for most people.
It Passed With Flying Colors
The thing that may surprise many seniors is that this bill easily passed in both the House and Senate of the state. It passed in spite of angry opposition from companies who make drugs.
They lobbied against the bill and tried to convince members of the legislature that it was a misguided concept that would only potentially increase the costs of medicine.
Their arguments on these points included the fact that this new law would add red tape to this process and complicate things for the drug company.
They also complained that the bill focused only on an increase in list prices rather than on what health insurance would cover on the medicine.
Angry members of the Pharmaceutical Research and Manufacturers of America claimed that the bill was an attempt to win political points, rather than serve the needs of patients.
To many seniors, these arguments may ring hollow. As drug prices rise exponentially over the years with no explanation from their manufacturers, it is easy for many to assume that price gouging is in effect.
This fact is especially true after the infamous Martin Shkreli raised prices for anti-AIDS medications astronomically and then offered no explanation beyond trying to make more money for his company.
This Law is Not Without Precedent
While this bill could help create a more transparent and fair pricing system for the medical world, it isn’t without precedent.
In 2016, Vermont created a bill that would force companies to justify why they were raising the prices of their drugs. This bill was focused specifically on the cost of 15 drugs with prices that had recently skyrocketed heavily.
And early in this year, Maryland passed a bill that let state officials investigate price hikes on generic medicines. As these drugs are supposed to be a cheaper alternative to more expensive specialized medications, this bill is designed to protect those who need it the most.
The bill provided a fining system that would penalize any company that was found to be guilty of price gouging.
The California bill is, therefore, just the latest in a series of state-based legislation that is attempting to protect seniors from unfair drug pricing.
While it has yet to be signed by the governor, the firm support for the bill from both Republicans and Democrats makes it quite certain that he will sign it before the October 15 deadline hits.
How This Could Help You
Even those who aren’t in California could benefit from this bill because of its positive implications. By forcing drug makers to explain why they are raising prices, there’s a good chance they would be unable to pursue any price-gouging methods.
As a result, your drug prices are likely to stay at a more appropriate and acceptable level, rather than suddenly increasing for no reason.
It’s also possible that the example of this bill could cause other states across the nation to pass similar laws. An increase in the number of states pursuing these measures could help keep drug companies from aggressively and unfairly targeting those who can least afford it.
Forcing medical companies to follow fair pricing standards may not sit right with more conservative seniors, but it could help protect them from severe financial loss.
There is a downside to this type of law. By forcing medical companies to explain their price increases further, there’s a chance that necessary price increases caused by legitimate problems, like an unexpected shortage, may be harder to justify.
As a result, companies could suffer from financial problems that make it even harder for them to get medicine to the population.
While there may be a small potential downside to this new law, it’s the kind of bill that could help a lot of seniors and protect them from shady or unethical medical practices.
It’s worth keeping track of the way this law affects the pharmaceutical industry and whether or not it causes other states in the country to follow its lead.