Lawmakers Introduce Bill Targeting Prescription Drug Prices
On Thursday, Rep. Elijah Cummings (D-Md.) and Sen. Bernie Sanders (I-Vt.), who is seeking the Democratic presidential nomination, introduced legislation that aims to lower prescription drug prices in the U.S., the Wall Street Journal reports (Loftus, Wall Street Journal, 9/9).
Prescription drug prices have garnered increased attention recently as individuals have struggled with the costs. Particularly, some cancer drugs and medications for other difficult-to-treat diseases have come under scrutiny.
Drugmakers have defended the high prices, saying the drugs can significantly lower other health care costs, such as hospital admissions. In addition, the Pharmaceutical Research and Manufacturers of America has said government-mandated cost controls would hinder innovation in the industry (California Healthline, 8/20).
The measure, called the Prescription Drug Affordability Act of 2015, would:
- Allow U.S. residents to import lower-cost medications from Canada;
- Encourage Medicare to negotiate medication prices with drugmakers; and
- Require drugmakers to disclose prices for treatments they sell in other countries.
Specifically, the bill would direct the HHS secretary to negotiate prescription drug prices covered under Medicare Part D. According to the Journal, federal law currently bars the federal government from such negotiations. Instead, the negotiations are handled by the various companies that administer Part D benefits. However, the Center for Economic and Policy Research estimates that direct negotiations from the federal government could save between $230 billion and $541 billion in Medicare spending over a decade.
Further, the legislation would require drugmakers to submit annual reports to the federal government detailing how they determine prices for their drugs, as well as their research and development costs. Under the measure, drugmakers would also have to disclose any federal benefits they received, like tax credits. Drugmakers would also be required to include the prices for and profits made on prescription drugs sold overseas.
In addition, the measure would eradicate any existing market-exclusivity periods for medications that companies had marketed in manners that violated civil or criminal laws. Such violations would be determined by:
- Civil judgements;
- Criminal convictions; or
The bill would also prohibit so-called "pay-to-delay" deals, in which makers of brand-name drugs provide something of value to generic drugmakers to ensure the delayed release of generic competitors.
PhRMA Criticizes Bill
In a statement responding to the bill, the Pharmaceutical Research and Manufacturers of America said, "Short-sighted attempts to arbitrarily cap spending would send a signal to researchers and investors that innovation is no longer valued and would result in fewer treatment options for patients." The group added that drugmakers and insurers already "aggressively negotiate prices" for prescription drugs and work to guide consumers to lower-cost and generic options (Wall Street Journal, 9/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.