Obamacare to blame for soaring drug costs: AEI
Americans concerned about not being able to afford life-saving treatments should not blame drug companies for high prices, a former health advisor to George W. Bush said Tuesday.
Dr. Scott Gottlieb of the conservative American Enterprise Institute told CNBC's "Squawk Box" there's not really a drug cost problem in the U.S., except for a small subset of specialty drugs that cost a lot but are providing a lot of benefit.
"What we have is an under-insurance problem," he said. "People are now under-insured, especially for catastrophic drugs if they get a disease like cancer or something like that because of these new [narrow] formulary designs … popularized by the Affordable Care Act."
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Defined on the government health care website, the term formulary, also known as a drug list, is described as a rundown of treatments covered by a prescription plan or another insurance plan offering prescription drug benefits.
"If the drug is not on your [Obamacare] formulary list, you have no co-insurance. You're completely on your own," said Gottlieb, an advisor to the Centers for Medicare & Medicaid Services in the Bush presidency. The agency, a division of the Health and Human Services Department, administers government health-care programs, including Obamacare. "Since these plans are the predominant structures in Obamacare, they're starting to migrate into commercial plans" in the workplace, he said.
Besides Main Street, outrage over drug pricing has become a hot topic on Wall Street and the presidential campaign trail.
Valeant Pharmaceuticals has been in the crosshairs in recent months in part for its strategy of acquiring drugs and then raising their prices. Turing Pharmaceuticals also drew national attention in September, after acquiring the 62-year-old medicine Daraprim and raising its price by 5,000 percent.
Democratic presidential front-runner Hillary Clinton seized on the Turing example as a springboard for her platform on reducing drug prices