Spurred by the furor over EpiPen price hikes, Democratic presidential nominee Hillary Clinton has proposed a new federal panel to determine if price increases for long-established prescription drugs are justified.
In cases where the increases are considered unjustified, Clinton proposes tough new enforcement mechanisms, including having the government buy and provide alternative therapies to patients, allowing temporary importation of lower-priced drugs from foreign countries and fining drug companies that excessively raised prices.
In the proposal released Friday, the Clinton campaign said if elected, she would convene representatives of federal health, safety and antitrust agencies to protect consumers from “outlier” price increases. They would work with patient advocates, independent experts and state regulators to respond to situations such as the recent prices increases in EpiPens and pyrimethamine.
The panel would investigate situations involving a life-saving or critically needed treatment that has long been available, with no meaningful change in the product and where there is limited or no competition among manufacturers. The members would determine whether a price increase was justified based on factors including the “trajectory” of the increase, the cost of production and the relative value of the product to patients.
The position paper does not address whether implementing these proposals would require congressional action or whether this could be done through administrative action.
Clinton previously had outlined a package of proposals to address the affordability of prescription drugs. Her proposals include allowing Medicare to negotiate drug prices; capping consumers' out-of-pocket drugs costs under their health plans; speeding U.S. Food and Drug Administration approval of generic products; boosting research into the comparative effectiveness of different drugs; restricting direct-to-consumer drug advertising; and requiring pharmaceutical companies to meet targets for investment in research and development.
While there is a growing public clamor for action on drug costs, Clinton's proposal, along with her previous ones, is likely to encounter strong resistance from congressional Republicans and from the powerful pharmaceutical industry. Such direct federal intervention in healthcare pricing issues would be a major departure from prior U.S. policy. But it would be in line with drug pricing policies in other advanced countries such as Canada, Great Britain, France, Germany and Australia.
“It's hitting the point where the drug cost issue has got everyone's attention, but I'm not sure what the coalition would be that would support heavy-handed government intervention,” said Chip Kahn, CEO of the Federation of American Hospitals, which is participating in the Campaign for Sustainable Rx Pricing, a broad coalition that supports market-based solutions.
Dr. Aaron Kesselheim, a pharmaceutical policy expert at Harvard Medical School, said some parts of Clinton's proposal could be implemented through administrative action without congressional approval. That would include the proposal to import cheaper generic drugs from foreign countries on an emergency basis to address a short-term public health crisis.
“Generic drugs are extremely important to people's lives and the U.S. economy, and better oversight of the generic drug market to make sure it's functioning optimally could have prevented (the problems with) EpiPen and Daraprim and other widely reported cases,” Kesselheim said.
The Clinton campaign's position paper said that between 2008 and 2015, drugmakers have increased the prices of almost 400 generic drugs by more than 1,000%, and in many cases the manufacturers had simply acquired the drug and raised the price without having developed it themselves.
But the Generic Pharmaceutical Association responded by arguing that data show most generic products have seen price declines in recent years. The group also said the generic products with higher prices cited in the Clinton position paper represent a tiny percentage of all generic drugs.
Clinton's concept paper has some proposals that “will produce a more competitive environment” for pharmaceuticals, the association said. But there are other parts of her proposal, “including her call for penalties, price caps, and greater government controls, which are antithetical to encouraging a well-performing competitive market.”
Republican presidential nominee Donald Trump has not spoken much about prescription drug prices or other healthcare issues. The brief seven-point healthcare agenda on his campaign website says he favors allowing consumers access to cheaper drugs imported from foreign countries.
During the primaries, Trump said he favored allowing Medicare to negotiate prices with drug companies, but that's not included in his healthcare position statement.