Clinton wants price cap after 5,000% rise in drug cost
Treatment for parasitic infection a ‘bargain’ at $750 a tablet, says company executive
Under Hillary Clinton’s plan, the $250 monthly cap would limit what insurance companies could ask patients to pay for drugs that treat patients with chronic or serious medical conditions. Photograph: CBS News/Reuters
US Democrat presidential candidate Hillary Clinton on Tuesday will propose a $250 (€225) monthly cap on prescription drugs to stop what she calls “excessive profiteering” by pharmaceutical companies.
At a campaign stop in Iowa, Ms Clinton will outline a plan to encourage the development and use of generic drugs and to end pharmaceutical companies’ ability to write off consumer-directed advertising as a business expense.
Under Ms Clinton’s plan, the monthly cap would limit what insurance companies could ask patients to pay for drugs that treat patients with chronic or serious medical conditions.
“It is time to deal with skyrocketing out-of-pocket costs,” Ms Clinton said on Monday during a campaign stop in Little Rock, Arkansas.
Her comments came after the New York Times reported on how a start-up biotechnology company, Turing Pharmaceuticals, raised the price of the 62-year-old Daraprim treatment for a dangerous parasitic infection to $750 a tablet from $13.50 after acquiring it.
“This drug saves your life for $50,000,” Martin Shkreli, the chief executive of Turing Pharmaceuticals said in an interview in New York. “It is still a bargain for health insurers. At this price, it is a no-brainer.”
The drug is very inexpensive for Turing to manufacture, Mr Shkreli said during an interview Monday with Bloomberg TV, though there are other administrative and regulatory costs for the company. Drug companies argue that they need to make decent profits to pay for the billions of dollars needed for research.
Critics of marketing drugs to consumers say it encourages the use of costly brand names over generics and can be confusing or misleading.
A series of court decisions has determined the practice cannot be banned outright because it is a form of commercial speech protected by the US Constitution.
Ms Clinton says the government could save billions of dollars by no longer allowing pharmaceutical companies to deduct what they spend marketing drugs to consumers, and those funds could be redirected into encouraging research and development.
The largest pharmaceutical companies are collectively earning $80 billion-$90 billion per year at higher margins than other industries while average Americans struggle to pay for medicine, Ms Clinton’s campaign said.
While Ms Clinton has maintained her front-runner status, she has been under pressure to take more populist stances to widen her lead over US Senator Bernie Sanders, her second-place rival for the Democratic nomination.
Ms Clinton would also prohibit what the campaign called “pay-for-delay agreements,” in which the owner of a brand-name drug pays a generic competitor to keep its product off the market for a period of time, usually as part of a litigation settlement.
Ms Clinton wants Medicare, the US government’s health insurance programme for the elderly, to be able to negotiate with pharmaceutical companies over drug prices and require more generous rebates, driving down overall costs.
Consumers would also be allowed to purchase drugs from other countries, where medicine is often less expensive, so long as sufficient safety standards are in place, Ms Clinton’s campaign said.
Traditional “Big Pharma” companies have long faced criticism for steadily raising prices of their prescription medicines in the US, often by jumps of 10 per cent or more.
Drugmakers are unapologetic about their five- or six-digit prices on new treatments for cancer, hepatitis C and high cholesterol. Sovaldi, a treatment from Gilead Sciences, can cure hepatitis C, but at a cost of $1,000 per pill.
Even more controversial have been eye-popping increases in costs for older drugs in limited supply, often after other drugmakers acquire them. They say the funds help cover research and development costs for new products.
For instance, prices for heart drugs Nitropress and Isuprel went up fivefold and twofold, respectively, after Valeant Pharmaceuticals International Inc purchased them earlier this year. In 2011, KV Pharmaceutical Co changed the price on a decades-old preterm labour treatment, Makena, to $1,500 a week from between $10 and $20.