On Monday, January 13, Gilbert Ware walked into a bank in Greenville, South Carolina, with a gun and demanded money.
The teller complied, and Ware made off with an undisclosed sum of cash. As he left, Ware saw a man in the parking lot sitting in his car. As Ware approached, the driver hit the gas. Ware shot at him, shattering the driver’s window and damaging the dashboard, but missing the man. Ware escaped the scene but was arrested nearby as he drove cautiously along a major road.
None of this is terribly interesting, until you learn that Gilbert Ware is 86 years old.
The idea of an octogenarian robber slowly leaving the scene of the crime makes for a funny meme, but it’s probably not terribly humorous to the bank teller at the other end of the gun, or the bystander at whom Ware took a shot.
Ware’s motives haven’t been disclosed. Maybe he was bored, or wanted a little extra pocket change. Maybe he was losing touch with reality. Or perhaps he needs to pay for prescription drugs.
In December, the Social Security Administration declared the cost of living adjustment (COLA) for the next 12 months. Social Security checks will increase by a whopping 1.6%. The day after Gilbert hit the bank, the Bureau of Labor Statistics reported that both headline and core inflation increased 2.3% last year. Drug prices were up 3%, and medical service prices increased 4.6%.
The difference between the 3% rise in prescription medicine costs last year and the 1.6% increase in Social Security benefits isn’t that big. But it’s just one year.
Over the last 10 years, prescription drug prices have increased 3% on average every single year, whereas Social Security benefits have increased in a range from zero for 2010 and 2011, to 3.6% for 2012. Through the power of compounding, over the full decade COLAs increased Social Security benefits by 16.2% while drug prices jumped 38.4%. As time goes by, the difference grows larger.
With millions of Baby Boomers retiring, benefits and costs for the elderly will play a bigger role in our national politics. Over the past week, presidential hopeful Bernie Sanders has taken aim at rival Joe Biden for supporting cuts to Social Security over the years, a charge that Biden vehemently denies.
At the same time, California has outlined the broad strokes of a plan to create its own prescription drug label that will manufacture drugs commonly used by those on the state Medicaid program. The new entity would charge the state much lower prices that it currently pays to buy drugs for beneficiaries. With one-in-three Californians signed up for the state’s Medicaid, this could create huge savings.
And who can blame them?
In the same week as the robbery, the release of the inflation numbers, and the proposed new drug company by the State of California, BioMarin Pharmaceutical told attendees at the J.P. Morgan Health Care Conference that it expected to price its new hemophilia drug, valrox, between $2 and $3 million per patient. The drug would surpass Zolgensma, at $2.1 million per treatment, as the most expensive drug in the world.
BioMarin acknowledges sticker shock, but said the cost of the drug should be compared to the lifetime existing therapies for hemophiliacs, which the company estimates at $25 million. Maybe those numbers are right, but several million dollars for one treatment of a drug sure sounds expensive.
The growing population of Americans on fixed incomes who use increasing volumes of prescription drugs is bringing the issue of cost to the forefront, and it should play a significant role in the coming elections.
With President Trump calling for importing cheaper drugs from other countries and most of the
Democrats supporting some form of government intervention in the current process, it looks like the question will be who promises the bigger benefit?
But then a more important question will follow. Will the next president follow through?
There’s been a lot of talk about making prescription drugs more affordable, especially for seniors, but so far, we’ve seen little more than pharmaceutical companies offering limited rebates and assistance.
If the industry doesn’t do more to ease the cost burden, especially on common drugs, we could be facing serious government intervention. It might be better than having octogenarians robbing banks, but it rarely leads to the efficient delivery of goods and services.