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 Fair Accountability and Innovative Research (FAIR) Drug Pricing Act 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 American taxpayers with soaring prescription drug prices,” said Senator Baldwin. “This 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 American public is demanding to know why life-saving prescription drugs – many developed with their taxpayer dollars – cost so much,” said Rep. Schakowsky. “The FAIR Drug Pricing Act will provide those answers. Prescription drug corporations should not be allowed to hide behind a curtain, refusing to disclose information on drug prices and price gouging with impunity. Congress has sat by while Mylan increased the cost of life-saving EpiPens from $100 to over $600, while Gleevec, a cancer drug that came on the market at $30,000 now costs more than $100,000. The average cost of insulin has gone up 231%. Now is the time for action. That is why I am proud to stand with Senator Tammy Baldwin, Senator John McCain, and the AARP introducing this long overdue legislation to expose the profiteering of drug corporations.”
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. Most recently, 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. A survey from the Kaiser Family Foundation found that nearly three-quarters of Americans believe that the prices for prescription drugs are unreasonable and 76% of those respondents credit this to pharmaceutical corporations setting the drug prices too high.
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. American taxpayers and individuals who rely on these prescription drugs are paying for these price increases, without any knowledge of why or what they are getting for their money.
“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.”
“For the millions of Americans who depend on life-saving medicines, open and honest prescription drug pricing is critical,” said John Rother, executive director for the Campaign for Sustainable Rx Pricing (CSRxP). “This bipartisan bill will give patients and taxpayers more information when drug corporations raise prices and is an important first step toward fixing America’s broken prescription drug market.”
The 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 drug products by more than 10 percent. 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 The Medicare Rights Center, Consumers Union, Doctors for America: Drug Price, Value, and Affordability Campaign, Families USA and the Center for Medicare Advocacy, Inc. and Public Citizen.
A copy of the bill text is available here.