Stop Skyrocketing Drug Prices, Sanders Says

Tuesday, September 1, 2015

BURLIGTON, Vt., Sept. 1 – U.S. Sen. Bernie Sanders (I-Vt.) said today he will introduce legislation to stop soaring increases in pharmaceutical prices.

Americans, who already pay the highest prices for prescription drugs in the world, saw prices jump 12.6 percent last year, according to the Centers for Medicare and Medicaid Services. That increase was more than double the rise in overall medical costs.

“Americans should not have to live in fear that they will go bankrupt if they get sick. People should not have to go without the medication they need just because their elected officials aren’t willing to challenge the drug and health care industry lobby,” Sanders said. The pharmaceutical industry spent nearly $230 million lobbying Congress last year, some $65 million more than any other industry.

“Between our government's unwillingness to negotiate prices and its failure to effectively fight fraud, it’s no wonder drug prices are out of control. We have got to make sure that everyone in this country can afford the prescription drugs that they need to live healthy lives,” Sanders said.

Sanders said Congress should authorize the Department of Health and Human Services to negotiate drug prices with pharmaceutical companies to bring down costs for Medicare drug benefits. “We should use our buying power to get better deals for the American people. Other countries do it. Why don’t we?”

He said there should be tougher penalties for drug companies that commit fraud. “We should pass legislation which says that drug companies lose their government-backed monopoly on a drug if they are found guilty of fraud in the manufacture or sale of that drug,” Sanders said.

To encourage wider availability of more affordable generic drugs, Sanders said Congress should ban the practice of brand-name drugmakers paying potential competitors to keep lower-priced generic substitutes off the market. Brand-name drugs cost, on average, 10 times as much as generics.

Sanders also would lower barriers to the importation of lower-cost drugs from other countries. Sanders was the first member of Congress to take Americans to Canada to purchase a prescription breast cancer drug at a fraction of the cost charged in the United States for the same medicine.

Sanders and Rep. Elijah Cummings (D-Md.) are investigating dramatic recent hikes in the costs of many generic drugs. They introduced legislation this year that would force companies to pay rebates to the Medicaid program if generic prices grew faster than inflation.

Ultimately, Sanders said, Congress should uncouple research and development costs from drug prices by rewarding innovation with a prize.

“The skyrocketing prices of prescription drugs are an example of the web of bureaucracy and red tape in the American health care system. What we need is a national health care system that puts people ahead of profits and health ahead of special interests,” said Sanders, who will soon introduce legislation to provide a Medicare-for-all, single-payer system to provide health care for all Americans.

To read more about Sanders’ proposals, click here.

http://www.sanders.senate.gov/newsroom/press-releases/stop-skyrocketing-drug-prices-sanders-says

The Prescription Drug Affordability Act of 2015

Americans pay – by far – the highest prices in the world for prescription drugs. For
example, in 2013, the U.S. spent nearly 40 percent more on prescriptions per person
than Canada, the next-highest OECD spender, twice as much as the average major
industrialized country, and nearly five times as much as Denmark. A 2014 survey by the
Commonwealth Fund found nearly twenty percent of the population, or 35 million
people, did not fill a prescription because they could not afford it, which can lead to
worse health outcomes. The Prescription Drug Affordability Act would lower these high
prices and increase access to medications through the following policies:

MEDICARE PART D NEGOTIATION

This legislation would instruct the Secretary of HHS to negotiate drug prices under the
Medicare Part D prescription drug program. According to a 2013 report by the Center
for Economic and Policy Research (CEPR), the federal government could save as much
as $541 billion over ten years by negotiating for prices similar to those paid in other
major industrialized countries.

PRESCRIPTION DRUG REIMPORTATION FROM CANADA

The bill would allow individuals, pharmacists, and wholesalers to import prescription
drugs from licensed Canadian pharmacies. The bill instructs the Secretary to issue
regulations already required under current law by January 1, 2016, and would also
delay regulations on the destruction of imported drugs until the rule for legally importing
drugs is finalized.

DRUG PRICING AND COST TRANSPARENCY

The bill would require pharmaceutical companies to report information to the Secretary
that affects drug pricing, including the total costs incurred for research and development
and clinical trials, as well as the portion of drug development expenses offset by tax
credits or paid by federal grants.

The legislation also requires drug companies to report not only the price information
charged to federal payers, but also requires companies to submit prices, profits, and
sale information in other countries in which those products are sold.

MEDICARE AND MEDICAID REBATES

The bill would restore the minimum rebate on drugs covered under Medicare Part D for
low-income Medicare beneficiaries, which was eliminated with the creation of Part
D. According to CBO, rebates would save $103 billion over 10 years.

The legislation would also require generic drug manufacturers to pay an additional
rebate to Medicaid if their drug prices rise faster than inflation, mirroring the current
requirements for brand name drug makers. According to CBO, these rebates would
save $1 billion over 10 years.

The bill would also close the Medicare Part D donut hole for brand and generic drugs by
2017, three years earlier than under current law.

PROHIBIT PAY-FOR-DELAY DEALS

The bill would prohibit anti-competitive arrangements between brand and generic drug
makers where the brand name drug manufacturers pays the generic manufacturer to
delay bringing their generic alternative to market. According to the FTC, these
anticompetitive deals cost consumers and taxpayers at least $3.5 billion in higher drug
costs every year. In FY 2012, the FTC found that there were 40 potential pay-for-delay
deals involving 31 branded products with combined U.S. sales of $8.3 billion.

PENALTIES FOR FRAUD CONVICTIONS

The legislation would terminate any remaining market exclusivity period on any product
found in violation of criminal or civil law through a federal fraud conviction or settlement.
Over the last decade, most major branded drug makers have either settled or been
convicted of fraud for violations including off-label promotion, kickbacks, anti-monopoly
practices, and Medicare fraud.


http://www.sanders.senate.gov/download/the-prescription-drug-affordability-act?inline=file