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Sanders and House Colleague Introducing Bill to Combat High Drug Prices

Among other provisions, Medicare would be empowered to negotiate prices

U.S. Senator Bernie Sanders and a House lawmaker are taking aim at high prescription drug costs with a new bill that would empower Medicare to negotiate pharmaceutical prices, allow consumers to import cheaper drugs from Canada, and require companies to disclose the prices they charge overseas.

Sanders, the Vermont independent running for the Democratic Party’s presidential nomination, and Representative Elijah Cummings, a Democrat from Maryland, are introducing the Prescription Drug Affordability Act of 2015.

“There is no rational reason why Americans should pay by far the highest prices in the world for prescription drugs,” Sanders said in an interview with the Wall Street Journal. “The result of that is people are dying and becoming much sicker because they can’t afford the medicines they need.”

Drug prices last year fueled the largest increase in U.S. prescription spending in more than a decade. Doctors and insurers have become increasingly vocal in their criticism of drug prices that can top $100,000 per patient annually, and some lawmakers at the state and federal level are proposing legislation to contain them.

Other lawmakers have previously proposed some of the measures backed by the Sanders-Cummings bill, but the proposals have met fierce opposition from drug manufacturers. One provision in the new bill would seek to cut prices by instructing the Secretary of Health and Human Services to negotiate prices of drugs covered by Medicare Part D — something President Barack Obama proposed earlier this year. Senator Amy Klobuchar, a Democrat from Minnesota, also backed the idea in legislation she reintroduced this year.

Under current law, the government is barred from negotiating prices in Part D, which covers prescriptions for the elderly and other Medicare beneficiaries. Instead, multiple companies that administer Part D plans handle price negotiations, but critics say this arrangement dilutes their negotiating clout. A summary of the bill released by Sanders’s office cites an estimate by the Center for Economic and Policy Research, a think tank, that Medicare could save $230 billion to $541 billion over 10 years by directly negotiating prices.

“Medicare pays for a huge amount of drugs,” Sanders said. “So it’s all the sense in the world to say, ‘Let’s sit down and negotiate.’”

Another provision in the new bill is similar to the drug-price transparency bills that have been introduced in several state legislatures this year. The Sanders-Cummings bill would require drug companies to submit annual reports to the federal government with information about how they price drugs, including the costs of research and development. Companies also would be required to disclose any federal benefits they have received, such as tax credits, as well as prices and profits for drugs sold in other countries.

The bill would also terminate any remaining market-exclusivity period for products that companies marketed in ways that violated criminal or civil law, as determined by criminal conviction, civil judgment, or a settlement. And it would prohibit agreements in which the maker of a brand-name drug pays anything of value to a generics manufacturer in exchange for delaying the introduction of a generic version of a branded drug, also known as “pay-to-delay” deals.

The Pharmaceutical Research and Manufacturers of America (PhRMA), an industry trade group, issued a statement in response to the bill saying, “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.” PhRMA said health care payers, including those running Medicare plans, already “aggressively negotiate prices” and steer members to lower-cost options such as generic drugs.

Source: Wall Street Journal; September 9, 2015.

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