'Despair and extreme anger': At roundtable, Rep. Ruben Gallego hears impact of high drug costs

Americans are struggling to make ends meet as they bear the brunt of high inflation. Adding to the burden is the soaring cost of a basic item rising even higher than inflation, that can have catastrophic consequences if forgone: prescription drugs.

While other countries around the world also are dealing with inflation, the United States is unique in the sense that it is the only industrialized country that does not guarantee health care and pays approximately double the cost of prescription drugs than comparable countries.

Arizonans are no exception.

Esaú Gutiérrez, a training specialist at the Arizona AFL-CIO, shared what it was like for his mother, who worked as a hotel housekeeper, and his public school custodian father.

"I grew up with a mother who rationed her insulin, who would go to the fridge and would sometimes do even like a third of her daily dose of insulin injections," he said. "And a father who didn't go to the doctor for ... seven years because he was scared of being stuck with a big bill until his sciatica finally got to him."

Gutiérrez's experience was one of many moving stories shared on Friday at Rep. Ruben Gallego's roundtable at the AFL-CIO headquarters in Phoenix.

Gallego, D-Ariz., who is running for the Senate seat held by Sen. Kyrsten Sinema, I-Ariz., heard from union leaders and representatives from other Arizona groups about the need for legislative action to curb the cost of prescription drugs. The majority of the approximately 20 people in the room knew someone who had either gone without medicine or took less than the prescribed dose because of the prohibitive cost.

Gallego will address this issue by introducing legislation this week that would expand upon a provision in the 2021 Build Back Better Act that would fine drug companies that increase the cost of their drugs faster than inflation. In late March, Sen. Catherine Cortez Masto, D-Nev., introduced companion legislation in the Senate.

The provision requires manufacturers who raise the price of certain drugs received through Medicare Part B and Part D higher than inflation to pay a penalty that goes into the Medicare Trust Fund. The inflation level for calculating acceptable increases is set based on the 2021 inflation levels.

The legislation Gallego is introducing in the House would include, when assessing fines, manufacturers who raise prices of certain Medicare Parts B and D-covered drugs faster than inflation through private insurance for everyone. The fine would be based on the inflation rate in 2016, lowering the threshold drug manufacturers can raise prices without facing financial penalties.

"When we talk about reducing inflation, the way we reduce inflation in people's everyday life is to reduce the (cost of) essentials. There is nothing more essential than pharmaceuticals," Gallego said. "It is gouging at the highest level. It is affecting people's health care, and it is something that we choose to allow. ... We're the only country in the world that allows it to happen."

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According to a Department of Health and Human Services' analysis of drug prices between 2016 and 2022, more than 1,200 drugs went up higher than the cost of inflation between July 2021 and July 2022, with an average price hike of approximately 32%. Inflation during that year was 8.5%.

While prescription drugs have high out-of-pocket costs, they also can impact how much money you have going into your pocket in the first place.

Fred Yamashita, executive director of Arizona's AFL-CIO, explained that the high cost of health insurance to cover expensive prescription drugs is taking up "a larger piece of the pie" when negotiating contracts, which causes workers to miss out on other benefits and cuts into the salary they receive.

Anna Cicero, who represented the Arizona Education Association-Retired, said that her retired sister has medical contacts in Canada and Mexico and spends hours searching for an affordable comparable drug there to the $500-a-month pill she takes here.

"Even for folks who are doing OK, it's still a big hit," she said, referring to the price of prescription drugs.

Cicero also said drug prices were contributing to high insurance costs for teachers, exacerbating Arizona's teacher shortage crisis.

"They're not leaving because they are stressed, they are leaving because they cannot afford health insurance," she said.

The high cost of prescription drugs forces some workers who need to retire because of sickness to keep working, Dora Vasquez of the AZ Alliance of Retired Americans explained, because they are worried about affording insurance to cover their medicine if they leave.

Gallego shared how those in physically demanding jobs are vulnerable to the high cost of medicine because they are forced to retire early.

"I have a lot of family members that had great construction jobs, their body goes to hack, and now they're looking at other types of jobs, as long as that job pays for health care. They still have to wait another 15, 10 years to get Medicare unless they had a very good union program," he said. "And so (the legislation is) going to help a lot of very active and involved seniors .... live a good life."

Paul Stapleton-Smith, of the International Alliance of Theatrical Stage Employees representing film and television, spoke about a 52-year-old union member who needed open heart surgery and was involved in a car accident.

"One traffic accident, one heart event, and suddenly his entire life ... (is) flipped upside down," Stapleton-Smith said. "And now he has prescription drug costs. He has a collective bargaining benefit, but the prices are screaming into the skies."

The prohibitive cost of drugs is a common complaint among his members, he said.

"... They're comparing it often to the fact that in COVID, we got free vaccinations. 'How did that happen?'" Stapleton-Smith said. "It wasn't the marketplace. ... It was good governance and the ability to negotiate and get those things done."

"So in terms of policy, we know what's possible," he continued. "And yet promises after promises, year after year after year, we get further and further behind and we don't work less. ... It's despair and extreme anger."

Gallego said that the pharmaceutical lobby is powerful, with three lobbyists per member of Congress, but he believes that the lobby can be overcome. He urged people to contact their House representatives and senators about supporting his legislation.

Despite this criticism, however, Gallego has taken $31,500 from pharmaceutical political action committees from April 2015 through October 2022.

In response, Hannah Goss, Gallego's campaign communications director, said: '"For eight years, Ruben Gallego has consistently voted against the interests of Big Pharma. If they want to support his work that will lower drug costs for Arizonans and slash their own profits by billions, that’s on them."

Gallego said the cost of prescription drugs has touched so many people that it has become a bipartisan issue with both parties introducing and supporting legislation that addresses it. He said that drug manufacturers will still make large profits, explaining that pharmaceutical companies in Switzerland and Germany are still multibillion-dollar organizations despite having food and drug competition.

Tara Kavaler is a politics reporter at The Arizona Republic. She can be reached by email at tara.kavaler@arizonarepublic.com or on Twitter @kavalertara.

This article originally appeared on Arizona Republic: US Rep. Ruben Gallego's new bill aims to curb prescription drug costs