Congress Needs to Protect the Public from Drug Price Gouging
By Jessie Gibbons, Senior Policy Analyst
Spending on prescription drugs grew 13% nation-wide last year – a rate that’s so abnormally high, it hasn’t occurred in over a decade. Costs for Medicare beneficiaries are growing too. Average Part D premiums rose by 13% in January, and the standard Part D deductible went up by $40, which is the steepest increase the program has seen since it was created in 2006.
TSCL feels that pricing in the prescription drug industry is fundamentally flawed, and that Congress isn’t doing enough to protect the public from price gouging. For instance, last year, Turing Pharmaceuticals, then headed by Martin Shkreli, bought the rights to a decades-old anti-infective drug and inexcusably hiked its price by 5,000% overnight. Many clinics and hospitals warn they can no longer afford to stock the drug, and that patients are suffering as a result.
Other drug companies are padding their profits by making anti-competitive deals with generic manufacturers so they delay the introduction of their products. And when leading companies are convicted of civil or criminal fraud, their fines are simply seen as the cost of doing business.
TSCL believes that Congress must act to improve the flawed system. We are urging lawmakers to pass sensible legislation called the Prescription Drug Affordability Act (S. 2023, H.R. 3513), sponsored by Senator Bernie Sanders (VT) and Congressman Elijah Cummings (MD-7).
The bill would take several important steps to reduce prescription drug costs, including the following.
- Require the federal government to negotiate Part D prices on behalf of Medicare’s 40 million beneficiaries like it does for Medicaid enrollees and veterans;
- Allow individuals, pharmacists, and wholesalers to import prescription drugs from Canada, where the same medications are usually much cheaper;
- Prohibit pay-for-delay deals so brand-name manufacturers can no longer pay generic drug makers to postpone the introduction of their products;
- Increase penalties for companies convicted of fraud by terminating their remaining market exclusivity periods;
- Require companies to make public all information that affects the pricing of their drugs, including research and development costs;
- Restore drug rebates for low-income Medicare beneficiaries and require generic drug companies to provide rebates if their prices rise faster than inflation;
- And close the Part D “doughnut hole” for Medicare beneficiaries by 2017, three years earlier than current law.
TSCL believes that the Prescription Drug Affordability Act would go a long way in reducing the rising costs of prescription drugs, and we will continue to advocate for it on Capitol Hill in the months ahead. For more information about the bill, read this month’s Congressional Corner from Congressman Cummings, its sponsor in the House of Representatives.