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Bill to make Drugmakers “Justify” Price Hikes

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epipensDemocrat and Republican Senate and House representatives introduced a bill last week to make drugmakers “justify” price hikes greater than 10 percent. USA Today reported that the bill was proposed due to the firestorm surrounding Mylan’s recent EpiPen price hikes. The lawmakers were also careful to point out that this move was not “regulation,” per se, so as not to offend any  Reagananomics worshippers.

Related: How Deregulation Destroyed U.S. Dominance

Facing public outrage over recent exorbitant EpiPen price hikes, Mylan recently announced it was taking the unprecedented step of offering a generic version of EpiPen at roughly half the price of the brand item. Drugmakers typically milk the profits from a brand name of a drug as long as possible before federal drug pricing guidelines force them to introduce or allow generic versions to hit the market.

The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act is co-sponsored by Sen. Tammy Baldwin (D-Wis.); Sen. John McCain (R-Ariz.); Rep. Jan Schakowsky (D-Ill.).

Drug Company Disclosure Demands

At least 30 days before raising the price of a particular drug by more than ten (10) percent, the bill would require a drugmaker to disclose to HHS – the U.S Department of Health and Human Services – the company’s spending on advertising, development, manufacturing, and research for the drug. The drugmaker would also need to report net profits from the sale of the drug.

Transparency Buzzword Sounds Good

Mr. McCain, with his heavy constituency of retirees using prescription drugs in his state of Arizona, said the bill “would bring much-needed transparency to prescription drug prices. Transparency leads to accountability, and it is past time that mantra applied to the skyrocketing cost of prescription medication.”

Ms. Schakowsky also echoed the transparency theme: “Prescription drug corporations should not be allowed to hide behind a curtain, refusing to disclose information on drug prices, and price gouging with impunity.”

Tammy Baldwin, (Rep. Wis.)
According to Ms. Baldwin, the bill is not likely to pass this year because it was introduced so late in the session. She said the main effort is “intended to create momentum” for 2017 when the lawmakers plan to reintroduce the measure.

Campaign for Sustainable Rx

Executive director for the Campaign for Sustainable Rx Pricing, John Rother, called the lawmakers’ effort a first step in repairing the “broken prescription drug market.” If it is a first step, it certainly seems to be a very small one.*

USPSTF Listing
Consumer advocates, as well as Mylan, seek to add EpiPen to USPSTF’s list of preventive medical services. Under the Affordable Care Act, insurers must cover services with that exclusive status at no cost to patients.

Mylan Profits Secure Either Way

The New York Times noted that while that designation could limit out-of-pocket costs for insured patients, it would also allow Mylan to raise prices further, because insured patients wouldn’t bear any of the treatment’s cost. Moreover, consumers could still be strapped with higher costs through higher premiums or copays for other drugs, if their insurers seek to mitigate the costs of covering the EpiPen at no cost.

Bill to make Drugmakers “Justify” Price Hikes

According to the Times, the USPSTF list does not include any other prescription drugs for diagnosed conditions, so it could be tough to get EpiPen listed. USPSTF has recommended at least one over-the-counter drug, aspirin. It usually lists treatments for patients only if there are “no signs or symptoms of the specific disease or condition” (O’Donnell, USA Today, 9/15; Flom, Roll Call, 9/15; Lipton/Abrams, New York Times, 9/16; Abrams, New York Times, 9/16).

Meanwhile, as more and more people are becoming aware of just how little power they have in deciding drug prices, more and more are turning to alternative healthcare, which is really a contradiction in terms. Whatever care one chooses is an “alternative.” The important thing is to choose yours wisely.

*As for the drug pricing flap, what difference could it make if companies had to disclose these things whenever they want to raise a price more than ten percent? They will likely be able to find a workaround even if only to save the “shame” of broadcasting their profits. Maybe just raising the prices by 9.9% over different periods of time will easily defeat the purpose of this bill, even if the bill ever reaches the point of being put into law in the distant future. This bill would appear to have no teeth to really control drug prices. Real action would require “regulation,” which most Washington D.C. politicians and most of the people of the U.S. have been brainwashed to believe would signal the death knell for Capitalism.


  • Bipartisan Bill to Justify Drug Price Increases
  • EpiPen Scandal takes Generic Turn
  • Deregulation Destroyed U.S. Dominance

by Matthews & Associates

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