“Drug corporations are sticking it to Americans with skyrocketing prescription drug prices,” said Senator Baldwin. “I’ve heard from countless Wisconsinites who continue to see dramatic price increases. They are struggling to afford their prescriptions that they have relied on for years and they want Washington to act. Our bipartisan reform will require transparency and accountability for drug corporations who are jacking up costs for families in need of affordable lifesaving treatments.”
With these aggressive increases in prescription drug prices, drug corporations are making lifesaving treatments unaffordable for families, seniors, taxpayers and our health care system. 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. Recent reports found that price increases accounted for 100 percent of the pharmaceutical industry’s $8.7 billion bump in earnings in 2016.
American taxpayers and individuals who rely on prescription drugs are paying for price increases, without any explanation of why or what they are getting for their money. Drug price transparency reforms like the FAIR Drug Pricing Act are extremely popular with the public as more than 85 percent of Americans support requiring drug companies to release information on how they set prices. In the same survey from the Kaiser Family Foundation, six in 10 Americans – including a majority of Democrats, Republicans and independents – identified lowering the cost of prescription drugs as a “top priority” for the President and Congress.
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 drugs that cost at least $100 by more than 10 percent in one year or 25 percent over three years. The report will require manufacturers to provide a justification for each price increase, manufacturing, research and development costs 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.
The FAIR Drug Pricing Act is also supported by AARP, Campaign for Sustainable Rx Pricing (CSRxP), Alliance of Community Health Plans (ACHP), National Multiple Sclerosis Society, AFL-CIO, 340B Health, The Medicare Rights Center, Families USA and Public Citizen.
Text of the legislation is available here.