WASHINGTON, D.C. – U.S. Senators Tammy Baldwin (D-WI) and John McCain (R-AZ) and U.S. Representative Jan Schakowsky (D-IL) today introduced the FAIR Drug Pricing Act. The bipartisan and bicameral legislation takes the first step in addressing skyrocketing prescription drug prices by requiring transparency for pharmaceutical corporations that plan to increase drug prices.
“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.”
“Like many Americans, far too many Arizonans have been unfairly burdened by the rising costs of prescription medication,” said Senator McCain. “The American people should not be forced to choose between filling a prescription or making their monthly mortgage payment. This 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.”
“The need for action to solve the prescription drug price crisis facing Americans is undeniable,” said Representative Schakowsky. “When a quarter of families in our country are unable to fill out prescriptions for the drugs they need due to skyrocketing costs, it is time to hold manufacturers accountable. If a prescription drug corporation wants to hike the price of life-saving medications, they should have to face the American people and explain why. I’m proud to join Senators McCain and Baldwin in proposing a bicameral, bipartisan solution to ensure drug companies come clean to the American people.”
Reports show that major drug corporations have drastically raised prices for top-selling drugs over the past five years, in some cases more than doubling prices. This troubling trend garnered significant public interest after Mylan increased the list price for a package of two EpiPen Auto-Injectors from just over $100 to more than $600. Despite the intense criticism, pharmaceutical corporations are continuing to increase their prices.
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.
“It’s abundantly clear that we need to address the unsustainable trend of sky-high prescription drug prices,” said AARP CEO Jo Ann Jenkins. “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.”
“The prescription drug market is broken. There is little competition, costs are out of control, and consumers are denied information on the costs of the medications they depend on,” said Will Holley of the Campaign for Sustainable Rx Pricing (CSRxP). “We applaud Senators McCain and Baldwin and Representative Schakowsky for introducing this bipartisan solution for Americans to better understand the real drivers of prescription drug prices. The open and honest information that this legislation creates would go a long way towards creating educated consumers and building a functional prescription drug market that works.”
The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act would require drug manufacturers to disclose and provide more information about planned drug price increases, including research and development costs. Increased transparency will help provide much-needed context for taxpayers, consumers and policymakers about the costs and value of medications, and may also incentivize companies to reassess the long-standing practice of relentless drug price increases.
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, Public Citizen, Kaiser Permanente, Marshfield Clinic Health System, and Security Health Plan.
Text of the legislation is available here.