It’s unacceptable that Americans pay three times more for prescription drugs than people in other countries pay for the same medications.
The cost of prescription drugs often increases more rapidly than other medical services, which of course outpace the general rate of inflation.
It’s becoming increasingly burdensome for people to pay for their prescriptions — so much so that almost one in four North Dakota adults surveyed last year didn’t fill a prescription in the past two years, with many citing cost as the reason.
Not surprisingly, 81% of the respondents in the AARP of North Dakota survey believe it should be legal in the United States to buy prescription drugs from Canada. Actually, it's legal under a federal law passed 17 years ago spearheaded by former Sen. Byron Dorgan, D-N.D.
Unfortunately, the federal law has never been implemented.
But North Dakota is exploring a way of bringing Canadian drug prices to the state’s residents.
The North Dakota Legislature’s Interim Health Care Committee is studying a proposal to establish a price indexing system that will be based on prices consumers pay in Canada’s biggest provinces.
The idea behind price referencing is that if we can’t import prescription drugs from Canada, we can in effect import their prices.
North Dakota is considering model legislation developed by the National Academy for State Health Policy.
Drug prices can be dramatically lower in Canada than in the U.S. For example, the lowest price for Xeljanz, an anti-inflammatory drug used to treat rheumatoid arthritis is $76 for a five-milligram tablet — almost four times higher than the cost in Canada’s largest provinces, $19.96.
The price index is just that, a price reference that can increase the bargaining power of consumers.
“This is not price controls, this is a negotiating tool to put pressure on manufacturers to give us a good price,” said Sen. Howard Anderson, R-Turtle Lake, a proponent of price indexing who is a retired pharmacist and former executive director of the North Dakota Board of Pharmacy.
Just as a consumer can shop around for a car at different auto dealers, checking prices, drug purchasers would have a powerful tool from prescription drug price indexing, he said.
North Dakotans, he added, have never been given a good explanation for why drugs purchased a few miles north of the border cost 40%, 30% and sometimes just 20% of the amount in the U.S.
If North Dakota consumers and other payers could pay the prices available to Canadians, the savings would be significant. The North Dakota Public Employees Retirement System, for example, would save an estimated $21.2 million if it could pay Canadian prices for the top 25 drugs for its members.
The federal government has utterly failed to rein in spiraling prescription drug prices. They keep rising at levels that are unsustainable. In the absence of federal action, states must fill the void.
North Dakota already has joined other states in passing a new prescription drug transparency law that took effect Aug. 1. Over time that law should provide valuable insight into the causes of prescription drug price increases.
The state should keep going and implement a prescription drug price referencing system to increase pressure on drug manufacturers to bring prices that North Dakota consumers pay more in line with those in other countries, including our neighbors in Canada.