With a new poster child for prescription drug price gouging to swing at, Hillary Clinton unveiled a wide-ranging proposal on Tuesday designed to rein in the skyrocketing drug costs that are draining government budgets and the pocketbooks of many Americans.
While the pharmaceutical industry insists that the tens of billions of dollars it rakes in annually are justified by the costs of promotion and research on new drugs, Clinton and other Democrats are attempting to ride a wave of resentment about mounting drug prices that are adding significantly to the cost of health care coverage and out-of-pocket expenses.
Related: Why a 62-Year-Old Drug Now Costs 5,000 Percent More
“Nobody in America should have to choose between buying the medicine they need and paying their rent,” Clinton said yesterday in Baton Rouge, La., in a run-up to the release of her plan in Iowa this afternoon.
Clinton’s proposals are part of a larger campaign effort to focus attention on major health care concerns of voters and to defend President Obama’s signature Affordable Care Act against relentless attacks from Republicans in Congress. The proposals were unveiled just weeks after her chief Democratic rival, Sen. Bernie Sanders of Vermont, offered plans of his own for attacking the “outrageous profits” of pharmaceutical companies.
“American families and seniors are being squeezed by rising drug costs – even as they have seen their wages and incomes grow far too slowly for years,” Clinton said in a statement. “The largest pharmaceutical companies are together earning $80-$90 billion per year at higher margins than other industries, while charging Americans thousands of dollars for new drugs – often much higher costs than in other developed countries.”
Her plan includes two ideas that Sanders already has proposed: allowing Medicare for the first time to negotiate drug prices with manufacturers, particularly for high high-cost specialty drugs with limited competition, and permitting Americans to import lower-cost drugs from Canada and other countries. Residents of some European countries with similar safety standards often pay half of what Americans pay for the same drug, according to Clinton’s statement.
Related: Drug Company Profits Soar as Taxpayers Foot the Bill
Among the other proposals:
- Deny tax breaks to companies for costly consumer advertising and insist that pharmaceutical companies instead invest in research and development.
- Encourage the development and production of generic drugs and reduce the period of time in which companies can exclusively sell new treatments.
- Cap monthly and annual out-of-pocket costs for prescription drugs to save patients with chronic or serious health conditions hundreds or thousands of dollars. Clinton said that Americans should be able to afford prescriptions for their conditions throughout the year and not have to stop taking needed medication. Health insurance plans would place a monthly limit of $250 on out-of-pocket costs for such patients.
Just in time for Clinton’s new proposals, The New York Times disclosed that the price of Daraprim, a drug that has been on the market for decades to treat patients with weakened immune systems like cancer and AIDS, had been jacked up from $13.50 a tablet to $750.
Related: Get Ready for a Surge in Costly Specialty Drugs
Turing Pharmaceuticals, a start-up firm founded by Martin Shkreli, a 32-year-old hedge fund investor, acquired the drug in August and almost immediately increased the price by more than 5,000 percent. Undaunted by an outpouring of anger, Shkreli told CNBC yesterday that the increase was fair and necessary to do more research and that he had no intentions of backing down.
When compared with the drug pricing practices of other larger companies, he said: “At this price, Daraprim is still actually at the low end of what orphan drugs cost. We’re certainly not the first company to raise drug prices.”
Yesterday, after news of the price hike broke, Clinton sent out a tweet and shook up the biotech markets by declaring: “Price gouging like this in the specialty drug market is outrageous.”
