US Democratic presidential candidate Hillary Clinton has unveiled a plan to combat what it refers to as "unjustified price hikes" for drugs that have been on the market for a long time.
Implications | Clinton's plan involves establishing oversight committees to determine whether the price of a long-standing drug has been unreasonably increased. Enforcement tools would also be introduced to ensure compliance. |
Outlook | Even if Clinton is elected president, she would need the support of US Congress to push through her reforms. This would likely be difficult to achieve as she would face fierce resistance from most Republicans. |
Clinton's plan involves establishing oversight committees at public health agencies and at competitive-practice agencies, which would determine whether the price of a long-standing drug has been subjected to an unreasonably high price increase. These committees would draw on the advice of patient advocates and independent experts on drug pricing as well as state-level and local regulators.
The criteria to assess whether price increases are excessive would include the rise's "trajectory", the cost of production, and the drug's relative value to patients. If the price increase of a long-standing drug is deemed excessive, the following enforcement tools could be used:
• Making alternatives available and increasing competition: Directly intervening to make treatments available and supporting alternative manufacturers that enter the market and increase competition to bring down prices and spur innovation in new treatments.
• Emergency importation of safe treatments: Broadening access to safe, high-quality alternatives through emergency importation from developed countries with strong safety standards.
• Penalties for unjustified price increases to hold drug companies accountable and fund expanded access: Holding drug makers accountable for unjustified price increases with new penalties such as fines – and using the funds or savings to expand access and competition.
Commenting on the need for the new plan, Clinton said, "Over the last year, we've seen far too many examples of drug companies raising prices excessively for treatments that have been available for years." Clinton added, "Between 2008 and 2015, drug makers increased the prices of almost 400 generic drugs by over 1,000%. Many of these companies are an example of a troubling trend – manufacturers that do not even develop the drug themselves, but acquire it and raise the price."
Clinton’s new plan is available here.
Outlook and implications
Clinton's new drug pricing plan follows recent media uproar over revelations that Mylan (Netherlands) had increased the price of its allergic reaction treatment EpiPen (epinephrine) from USD100 in 2008 to USD600 in 2016. Although Mylan has since undertaken to significantly reduce out-of-pocket costs for EpiPen and introduce a new generic version (see United States: 31 August 2016: Mylan to launch cut-price generic version of EpiPen), Mylan's price rises have re-ignited the controversy over huge price prices imposed by Turing Pharmaceuticals (US) and Valeant Pharmaceuticals (Canada) (see United States: 2 March 2016: Clinton campaign ad targets Valeant for "predatory pricing")
The new plan is Clinton's second to tackle drug pricing. She announced a broader initiative to tackle the pricing both of innovative and long-standing prescription drugs last September. The original plan, which is available here, involved allowing Medicare to negotiate drug prices, capping monthly drug costs, and ensuring drug companies invest in research and innovation, rather than marketing.
While clearly determined to tackle drug pricing, Clinton faces many hurdles. If she is elected president in the upcoming elections, she would still need the support of US Congress to push through her reforms. This is likely to be difficult to achieve, given that she would face fierce resistance from most Republicans.