Mayor Tells 60 Minutes: The Fix Is In on Rx Prices

Larry Morrissey, former mayor of Rockford, Illinois. Screen Shot: 60 Minutes/CBS News

What one city did to fight high drug prices reveals a drug supply chain in which just about every link can benefit when prices go up

(CBS) The Rockford File is the story of how one very expensive prescription drug threatened to financially cripple an entire city.

That city is Rockford, Illinois, an old industrial town outside of Chicago.

Rather than using a health insurance company, Rockford has, for years, paid its own health care costs for its 1,000 employees and their dependents.

“Why is health care so expensive?” Because the fix is in.

When Rockford got hit with the drug bill it was so enormous the mayor at the time set out to understand why.

Larry Morrissey: Everybody’s asking the question, “Why is health care so expensive?” Because the fix is in. That’s the short answer.

When Larry Morrissey was mayor of Rockford he was hit with a crisis: the city was bleeding money.

Leslie Stahl: You found out that the health care budget was going bust.

Morrissey: Yea, the budget was out of control.

Stahl: And you had to squeeze other things. Like what?

Morrissey: Hiring police and firefighters. Keeping firetrucks and other equipment on the streets.

Stahl: And I heard that it was just one drug.

Morrissey: One particular drug called Acthar.

In 2015, two small children of Rockford employees were treated with Acthar, a drug that’s been on the market since 1952.

It’s used to treat a rare and potentially fatal condition called infantile spasms that afflicts about 2,000 babies a year.

Stahl: How much was on the budget for those two babies?

Morrissey: We were spending hundreds of thousands of dollars for these sick baby cases.

Stahl: Close to $500,000– is what we heard.

Morrissey: Combined, yeah.

“Every company can make profits, but this is profiteering. This is gouging.”

In 2001, Acthar sold for about $40 a vial. Today: more than $40,000. He wanted to know how that could’ve happened. But for two years he kept running into a brick wall.

Stahl: Why was it so hard to find out what was going on? And why?

Morrissey: It’s absolute secrecy. There’s an absolute opaque system of pricing for drugs in our country. That’s part of the problem. Read the full interview at CBS News

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