The Stop Price Gouging Act would hold manufacturers accountable for unjustifiable drug price increases.
This week, several Senators introduced The Stop Price Gouging Act, which aims to hold pharmaceutical manufacturers responsible for sizeable price increases, according to a press release.
Senators Tom Udall (D-NM), Sherrod Brown (D-OH), Kirsten Gillibrand (D-NY), Al Franken (D-MN), Jack Reed (D-RI), and Maggie Hassan (D-NH), introduced the legislation, which would penalize companies that participate in price gouging without cause. The practice can result in out-of-pocket spending spikes for patients with chronic conditions, such as cancer or opioid misuse disorder, according to the release.
“New Mexicans who rely on prescription drugs for life-saving treatment shouldn't be at the mercy of corporate executives padding their bottom line,” Udall said in the release. “No one should face going broke in order to get well -- we need to stop unfair price-gouging by Big Pharma and ensure people can access affordable medication when they need it. Our bill would require badly needed transparency in how pharmaceutical corporations set their prices and justify their cost spikes.”
Consumer reports have indicated that nearly 28 million Americans experienced a dramatic increase in the price of prescription drugs within the last year. In 2015 alone, Americans spent $324 billion on prescription drugs, with taxpayers bearing 70% of the spending. President Donald Trump and numerous lawmakers have voiced support for lowering the cost of prescription drugs.
Under the proposed legislation, pharmaceutical companies would be required to report any increases in drug costs to the Health and Human Services Inspector General and the public. Additionally, they would be responsible for justifying the cost hike, putting an end to increases without cause.
“The purpose of prescription drugs is to allow Ohioans to live longer, healthier lives — not to line the pockets of Big Pharma executives,” Brown said. “Too many Ohioans still struggle to afford the medicine they need, and often, the culprit is price gouging by big pharmaceutical corporations. It has to stop, and that’s why I’m introducing the Stop Price Gouging Act, to protect Ohioans from prescription drug price spikes and to require drug companies to report increases in drug prices, and justify their increases.”
The Stop Price Gouging Act would subject companies that participate in price gouging to tax penalties that correspond with the price spike, according to the release.
Importantly, the revenue generated would be reinvested in future research and development initiatives conducted at the National Institutes of Health.
“One of the biggest problems in the prescription drug industry is that there isn’t nearly enough accountability,” Franken said. “Without explanation, millions of Americans see their drug bills become more and more unaffordable each year. Our bill would help keep price gouging in check by forcing drug companies to justify price spikes and penalizing them if they can’t. This step would help put the pharmaceutical industry on a road that puts the livelihoods of patients ahead of profits.”
The proposed bill would also instruct the Government Accountability Office to conduct a study to determine how manufacturers set initial prices and develop best practices for monitoring drug prices, according to the release.
Thus far, at least 4 manufacturers have publically announced they are committed to limiting drug cost increases, the Senators reported. The bill would protect patients by increasing accountability among the companies and prevent prices that skyrocket seemingly overnight, according to the release.
“Year after year, we continue to see astronomical increases in drug prices, and rarely is there a good reason offered for these price jumps,” Reed said in the release. “We need to bring some measure of transparency to prescription drug pricing. This legislation will help hold drug companies accountable if they try to unfairly hike prices on medications that patients depend on.”