Sanders to Introduce Wide-Ranging Drug Cost Bill

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By Bronwyn Mixter

Sept. 1 — Sen. Bernie Sanders (I-Vt.) said Sept. 1 that he will introduce legislation to stop soaring increases in prescription drug prices.

Sanders said the bill would authorize the Department of Health and Human Services to negotiate drug prices with pharmaceutical companies to bring down costs for the Medicare Part D prescription drug program.

He also said there should be tougher penalties for drug companies that commit fraud. 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, according to a summary of the legislation.

“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.

Generic Drugs, Rebates

Sanders said the bill also would ban “pay-for-delay” deals under which makers of brand-name drugs pay potential competitors to keep lower-priced generic substitutes off the market.

The bill also would require generic drug manufacturers to pay an additional rebate to Medicaid if their drug prices rise faster than inflation, mirroring the current requirements for makers of brand-name drugs, the summary said.

In addition, 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 the summary. The bill also would close the Medicare Part D doughnut hole, or coverage gap, for brand and generic drugs by 2017, three years earlier than under current law.

Drug Importation

Sanders also said Congress should lower barriers to the importation of lower-cost drugs from other countries. He said his bill would allow individuals, pharmacists and wholesalers to import prescription drugs from licensed Canadian pharmacies.

“Americans should not have to live in fear that they will go bankrupt if they get sick,” Sanders said. “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.”

Objections to Bill 

Mark Merritt president of the Pharmaceutical Care Management Association, told Bloomberg BNA that it's not a good idea to have politicians determining the price of drugs because it tends to make prices go higher, not lower.

The PCMA represents pharmacy benefit managers.

The better way is to let competition work so that the drug developers that are the most competitive and offer the best discounts get the best placement on a formulary, Merritt said. “That's what's working in Medicare Part D right now,” he said.

“Price controls never work because it tends to actually lead to higher prices if you bring politics into it instead of letting market forces drive down costs,” Merritt said.

A spokeswoman from the Pharmaceutical Research and Manufacturers of America told Bloomberg BNA in an e-mail that “ensuring patients have access to the health care they need is critical. But short-sighted policies that would hinder access and slow the development of innovative medicines to help patients live longer, healthier lives is not the answer.”

“Too often, discussions about costs focus on the 10 percent of health care spending that goes toward innovative, life-saving medicines rather than looking at the big picture and ways that medicines can help avoid other unnecessary care—while ignoring how the marketplace for medicines works to hold down costs,” PhRMA's spokeswoman said. “Payers aggressively negotiate prices (including in Medicare) and use their power to incentivize use of lower cost options. Over time, medicines come off patent and face additional competition from lower-cost generics.” 

To contact the reporter on this story: Bronwyn Mixter in Washington at bmixter@bna.com

To contact the editor responsible for this story: Brent Bierman at bbierman@bna.com

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