Hillary Clinton will announce a plan Friday that aims to stop drug companies from charging “excessive, unjustified” prices to consumers, spurred by the dramatic increases in specific drug prices.
Advertisement
Clinton has been animated by drug price surges since she launched her campaign in 2015.
That is an attempt to reassure pharmaceutical companies that the intervention by the government will not squelch development of new expensive treatments. The body wouldn’t officially be able to set prices on long-available drugs, but its ability to slap a financial penalty on the next company that jacks up the cost of a 20-year-old medical implement or pill would come pretty darn close. How long does a treatment have to be around to be “long-standing”?
“When Congress created the Medicaid Drug Rebate Program, it was with the intent of ensuring that the federal program responsible for providing health coverage to millions of our most vulnerable populations always received the best possible price for prescription drugs”, they write.
The upshot is that the player keeps hiking the price of the drug, even though it costs lives.
Dr. Peter Bach, the director of a nonpartisan health policy research group at New York’s Memorial Sloan Kettering, said Clinton’s announcement was a “flag” for drug manufacturers that her administration would notice and respond to steep price hikes.
The plan is based on an oversight board, made up of federal officials, that would monitor price increases for drugs.
But let’s keep the spotlight momentarily on Mylan and its CEO, Heather Bresch, whose compensation rose from $2.5 million in 2007 to nearly $19 million a year ago as the price of EpiPens soared from about $57 to nearly $318.
However, separating price hikes in drugs from being acceptable could be hard. The subsidies would be paid for in part by fines issued to companies found to have implemented an “unjustified, outlier price increase”.
Clinton’s influence was also felt a year ago when she weighed in on Shkreli’s increases on Daraprim’s price.
But Clinton’s plan may make an industry uncomfortable that commonly uses similar tactics, though to a less extreme degree.
Should the drug maker hit its stock and earnings targets, CEO Heather Bresch would receive $28 million, while Company President Rajiv Malik would get $24 million and Executive Chairman Robert Coury, would collect $20 million.
Advertisement
But he compared the idea to antitrust protection, which requires regulators to judge when there is too much consolidation within a market.
