This group would draw a line between price increases that are acceptable and those that are not. In response to an outcry, Mylan said last week that it will take several steps to cut prices, including introducing a lower-priced generic alternative.
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Her announcement comes amid a firestorm of criticism for a huge price increase by Mylan, the makers of the allergy device EpiPen, which severe allergy sufferers carry at all times to deliver an emergency dose of epinephrine in the event of an attack.
And Turing Pharmaceuticals, formerly headed by hedge fund manager Martin Shkreli, purchased the license for an anti-parasitic drug called Daraprim and then raised the price by over 5,000 percent.
To figure all those details out, Clinton proposes a new watchdog group that will be charged with protecting consumers from drug price hikes.
The letter, sent to Health and Human Services Secretary Sylvia Burwell, asked for more information about whether the EpiPen had been classified as a generic drug, which may have led to Mylan underpaying Medicaid.
“They will determine an unjustified, outlier price increase based on specific criteria including: 1) the trajectory of the price increase; 2) the cost of production; and 3) the relative value to patients, among other factors that pose a threat to public health”, the plan explains, describing the oversight panel.
“Over the past year, we’ve seen far too many examples of drug companies raising prices excessively for long-standing, life-saving treatments with little or no new innovation or R&D”, Reuters quoted Clinton as saying in a statement.
“I don’t know if Mylan really understands that this anxiety is real for parents and when they raise prices”, Wells Fargo analyst Davis Maris said. Given price increases take place on nearly every drug, what will be deemed excessive.
Clinton’s plan would empower the task force to investigate dramatic price hikes for potentially life-saving medications. If that team found that a price hike was unjustified, it would have the power to intervene directly in the marketplace, by imposing penalties on the offending drug company or funding competitors’ efforts to create competing products in order to bring down prices. Joe Manchin of West Virginia,”immediately reduce the price”.
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The news contributed to yet another stop in Mylan stock, which was down more than 4 percent today. Throughout her campaign, Clinton has championed the lowering of prescription drug costs, including proposals to allow Medicare to negotiate prices, cap monthly drug costs, and ensure that drug companies invest more of their revenues in research and innovation.
