Big Pharma can perhaps thank the EpiPen dust-up for delivering a jolt of adrenaline to Congress. Legislation introduced today is being billed as the "first step" in addressing skyrocketing drug prices by requiring more transparency.
“Drug corporations are sticking it to American taxpayers with soaring prescription drug prices,”said Sen. Tammy Baldwin (D-WI), one of the bill's sponsors. “This bipartisan reform will require transparency and accountability for drug corporations who are jacking up costs for families in need of affordable lifesaving treatments.
The measure -- dubbed the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act -- would require drug manufacturers to provide more information about planned drug price increases, including research and development costs.
“The American public is demanding to know why life-saving prescription drugs – many developed with their taxpayer dollars – cost so much,” said Rep. Jan Schakowsky (D-IL) in a news release. "Congress has sat by while Mylan increased the cost of life-saving EpiPens from $100 to over $600, while Gleevec, a cancer drug that came on the market at $30,000 now costs more than $100,000. The average cost of insulin has gone up 231%. Now is the time for action."
Meds or mortgage?
Sen. John McCain (R-AZ) said Americans "should not be forced to choose between filling a prescription or making their monthly mortgage payment."
McCain said the legislation would bring much-needed transparency to prescription drug prices – a policy that 8 in 10 Americans support, according to the Kaiser Family Foundation. Transparency leads to accountability, and it is past time that mantra applied to the skyrocketing cost of prescription medication, he said.
U.S. prescription drug spending reached a record high of $425 billion in 2015, accounting for almost 16.7 percent of all U.S. health care spending, with expectations that spending will surpass $600 billion by 2020.
“It’s abundantly clear that we need to address the unsustainable trend of sky-high prescription drug prices,” said Jo Ann Jenkins, CEO of AARP, which has lined up behind the measure. “The FAIR Drug Pricing Act is an important step in demanding more transparency from pharmaceutical companies when they dramatically raise the prices of their products.”
Nearly 60% of Americans take at least one prescription drug on a regular basis, according to a study published in JAMA, Jenkins noted. The average senior takes four medications on a regular basis. According to an AARP report, retail prices for a combined set of widely used prescription drugs consistently increased faster than general inflation in every year from 2006 to 2013.
The average annual retail cost of widely used specialty prescription drugs was over $53,000 in 2013, more than twice the median income of $23,500 for Medicare beneficiaries.
What it would do
Specifically, the FAIR Drug Pricing Act would require drug manufacturers to notify the U.S. Department of Health and Human Services (HHS) and submit a transparency and justification report 30 days before they increase the price of certain drug products by more than 10 percent.
The report will require manufacturers to provide a justification for each price increase, manufacturing, and research and development cost for the qualifying drug; net profits attributable to the qualifying drug; marketing and advertising spending on the qualifying drug; and other information as deemed appropriate.
The bill will not prohibit manufacturers from increasing prices, but it will for the first time give taxpayers notice of price increases and bring basic transparency to the market for prescription drugs.