Clinton Seeks Cap on Drug Expenses, Would Let Medicare Negotiate

Hillary Clinton unveiled a plan in Iowa that features a $250 per month cap on drug costs for patients with chronic conditions. This comes 2 weeks after her chief rival for the Democratic nomination, US Senator Bernie Sanders of Vermont, introduced a bill aimed at reining in drug costs. In the summer, The American Journal of Managed Care said polling showed that rising drug costs were poised to become a major issue in the 2016 campaign.

Hillary Clinton joined the rising chorus over prescription drug prices Tuesday when she proposed a $250 per month cap on out-of-pocket costs for those with chronic conditions, said Medicare should be able to negotiate drug prices, and even said Americans should be able to buy some drugs from Europe.

The former Secretary of State made her case in Iowa, scene of the first-in-the-nation caucuses for the 2016 presidential nomination. This comes 2 weeks after her chief rival Bernie Sanders, the US senator from Vermont, co-sponsored a bill that would allow some drug imports from Canada and would also allow Medicare to bargain on drug prices. The bill would also close the Medicare Part D loophole for low-income beneficiaries and ban some anticompetitive deal-making between brand and generic drugs.

John Castellani, president and CEO of the Pharmaceutical Research and Manufacturers of American (PhRMA), said Clinton’s would stifle innovation and reduce patient access.

“The sweeping proposals outlined in Secretary Clinton’s plan to regulate prescription drug prices would restrict patients’ access to medicines, result in fewer new treatments for patients, cost countless jobs across the country and could end our nation’s standing as the world leader in biomedical innovation,” he wrote in a blog post.

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While many acknowledge that both the Clinton and Sanders proposals would face stiff opposition in the current Congress, which is controlled by Republicans, both plans are tapping the growing public frustration with the rising cost of prescription drugs. Public polling has captured that sentiment since the spring; it crosses partisan lines with no signs of abating, as evidenced with the creation of the Campaign for Sustainable Rx Pricing, a Washington-based initiative to educate lawmakers and presidential candidates about solutions to the problem. (In July, The American Journal of Managed Care predicted that the cost of prescription drugs would become a campaign issue for the 2016 presidential candidates.)

Public fury reached a peak this week when word came that Turing Pharmaceuticals, owned a 32-year-old hedge fund manager, had purchased the rights to Daraprim, a 62-year-old generic drug that treats a life-threatening parasitic infection. Overnight, the drug’s price increased from $13.50 to $750 per tablet, although Turing has since promised to lower it amid the outcry.

Clinton referenced the incident in her Iowa remarks. "That is not the way the market is supposed to work. That is bad actors making a fortune off of people’s misfortune,” she said. "Pharmaceutical companies can charge astronomical fees, far beyond anything it would take to recoup their investment and far beyond’’ what they charge consumers outside America, she said.

Elements of Clinton’s drug plan include:

·         Eliminating tax breaks for consumer advertising and requiring pharmaceutical companies to invest US taxpayer dollars in research and development. Firms that receive federal research dollars would be required to reinvest a percentage back into research.

·         Limiting out-of-pocket drug costs to $250 per month for patients with certain chronic or serious health conditions. This responds to complaints from the nation’s oncologists that life-saving drugs are off-limits to many cancer patients due to high co-payments, and oncologists are seeing poor adherence for certain therapies.

·         Promoting generic drug production by trimming the amount of time companies can exclusively produce new treatments.

·         Letting Americans import drugs from Europe if the safety standards are similar. In recent weeks, for example, a new class of cholesterol-fighting medications, the PCSK9 inhibitors were approved in Europe at lower prices than manufacturers are charging in the United States, where the drugs’ wholesale prices were listed above $14,000 a year.

·         Giving Medicare negotiating power, especially for drugs with limited competition. The Affordable Care Act specifically excluded this provision but instead gave Medicare an additional discount, but rising overall prices have wiped out its effect it some cases.

PhRMA’s objections to the specifics of Clinton’s plan do not address the overwhelming public frustration with high drug prices; the sentiment is not limited to consumers but has extended to physicians who cannot get patients to stick with medication due to cost. Meanwhile, President Barack Obama has called for giving Medicare negotiating power in the 2016 budget and HHS Secretary Sylvia Mathews Burwell has made similiar pleas in public remarks.

Polling by the Kaiser Family Foundation found in April that three-quarters of the public believed making drugs affordable for those with chronic conditions should be a priority, and later polling found most Americans blame drug companies for high prices. Earlier this year, a group of the nation’s leading oncologists signed an editorial in the Mayo Clinic Proceedings calling for solutions to rising drug costs.