Prescription Drug Legislation Delayed by Coronavirus
By Shannon Benton, Executive Director
The coronavirus pandemic has taken priority on Capitol Hill in recent months. As a result, action on a number of important issues, including comprehensive prescription drug legislation, has been postponed. Bi-partisan legislation, The Prescription Drug Pricing Reduction Act (S.2543) introduced by Senator Chuck Grassley (IA), appeared to have enough support to pass in Congress in December of 2019, but so far this year the bill has made little headway.
The legislation, among other things, would reduce Medicare Part D out-of-pocket costs for beneficiaries, by establishing a $3,100 cap on annual out-of-pocket spending. A major sticking point for many GOP senators is a provision that limits drug price increases to the rate of inflation, which they deem a government price control. Participants in TSCL’s June Senior Cost Survey, on the other hand, are overwhelming in favor of tying drug prices to the inflation rate. About 8 - out of 10 survey participants support this method of curtailing rising drug costs.
In addition to delaying action on legislation, the coronavirus has brought up a new issue of concern — that companies are profiteering during a global medical crisis. Several House progressives pushed unsuccessfully to include measures to lower the cost of coronavirus treatments — such as banning drug companies from having exclusive rights to a drug— into a recent Democratic stimulus bill. Congress authorized more than $7 billion for research and industry subsidies to hunt for a COVID-19 vaccine. Now questions are growing over who is financially benefiting by securing monopoly licensing rights to taxpayer-financed drugs.
The Washington Post recently reported on one experimental coronavirus pill, called (EIDD-2801), developed by Emory University with $16 million in U.S. tax revenues. The drug was licensed in a deal struck by Ridgeback Biotherapeutics, a company with no laboratories or manufacturing facility, and owned by a wealthy hedge fund manager and his wife. Just two months after acquiring the rights to the antiviral therapy, Ridgeback sold exclusive worldwide rights to Merck pharmaceuticals, the drug giant.
Demands are increasing both here in the U.S. and abroad, that drug companies set affordable prices on coronavirus treatments and vaccines, and distribute drugs equitably. Until the coronavirus, cutting drug costs was a number one priority that Americans held for this Congress. Let’s tell Senate Leader Mitch McConnell to get back to business and allow a vote on The Prescription Drug Pricing Reduction Act (S.2543).
Sources: “Hedge Fund Manager Stands To Profit On ‘Flip’ of Taxpayer-Funded Coronavirus Drug,” Christopher Rowland, The Washington Post, June 11, 2020.