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In March 2015, Health Attitude: Unraveling and Solving the Complexities of Healthcare was published. One of the recommendations made in the book, to address the spiraling healthcare cost for Americans, was to allow Medicare to negotiate the price of drugs. It was a lone voice at the time, but since then more and more people, including the President, have echoed the point. It is so obvious to anyone who looks into the double digit rises in the cost of medications. A friend of mine was at a cocktail party attended by a pharmaceutical company CEO. My friend asked the CEO why he kept raising drug prices. The answer was, “Because we can.” We need someone to stand up to big pharma. The new head of HHS is the one.

To put our healthcare cost in perspective, consider two astounding points:

  • The InSight Spacecraft mission to Mars cost roughly $800 million. Many have said Wow that is a lot!  In America, we spend $10 billion PER DAY on healthcare.
  • Every day, 10,000 Americans turn 65 and join Medicare. Each of them will cost taxpayers roughly $10,000 per year. In other words, each day, we add $100 million dollars to the healthcare bill for Medicare. 

Needless to say, the cost of healthcare is out of control. By 2026, the current estimate is the healthcare bill will be $5.5 Trillion per year and continuing to grow. Something has to give. There is a long list of reasons for the extraordinary cost of American healthcare. One of the culprits is the double digit rise in the cost of prescription drugs. 

Health and Human Services (HHS) head Alex Azar is saying all the right things. In a March post, “Big Changes Coming to Healthcare“, I quoted from Mr. Azar’s first major speech after taking on the HHS role. He said, “Change is possible, change is necessary, and change is coming.” An October post, “Drug Pricing Transparency“, was about Mr. Azar’s view of TV prescription drug advertising where he said the list price of the drugs big pharma is pushing should be shown clearly in the ad. The industry has pleaded that would be a violation of their first amendment rights. Huh? My view, shown in a number of articles and media interviews has been we don’t need TV advertising at all. We are the only country (except New Zealand) which allows it. Forcing the industry to show the price of the drugs is a good compromise.

The biggie is letting Medicare negotiate the price of drugs. Azar knows the industry and has gained bipartisan support for big changes. On Tuesday, HHS announced a major revamp of how Medicare drug pricing will change. The CNBC interview above makes it clear what Mr. Azar thinks and how he is approaching the problem. I found it refreshing. Take a look above or here.