In America, nobody should have to wake up at 3AM worried about how they’ll afford their prescription drugs and still put food on the table for their family. But today, 3 in 10 Americans don’t take their medication as directed because they can’t afford the skyrocketing cost of prescription drugs. 1 in 5 Americans report having trouble paying for basic necessities like food and housing because of their prescription drug costs.
While families struggle to make it to the end of the month, pharmaceutical companies are turning record profits. They’re spending nearly as much on advertising as R&D. They’re manipulating their market power to hike prices on lifesaving generic drugs. They’re making twice the profit of the average industry in America and still increased drug prices by 10.5 percent over the past six months alone. Meanwhile, they are charging dramatically higher prices to American consumers.
What has Donald Trump done? Refused to put people over profit and handed Big Pharma and the health care industry a $100 billion tax cut instead. Drugmakers used the windfall to enrich their shareholders and families have been slapped with double-digit price increases on 2,500 drugs since Trump took office.
Kamala Harris believes it’s time for that to change. When Harris is president, families won’t wake up at 3AM worried about the cost of their prescription drugs. As president, she’ll require pharmaceutical companies to set fair prices for prescription drugs and tax profits made from abusive drug prices at a rate of 100 percent. These profits will go back directly to consumers. And if Congress refuses to act within 100 days, the Harris Administration will investigate price-gouging by pharma companies on her own and take executive action to lower the cost of their drugs.
HERE’S HOW WE’LL DO IT
Harris will stop pharmaceutical companies from price-gouging patients by setting a fair price for what they can charge for prescription drugs.
- The Department of Health and Human Services (HHS) will identify and set a fair price for any prescription drug that (1) is sold for a cheaper price in any comparable OECD country, or (2) increases its annual price by more than the cost of inflation.
- A prescription drug’s fair price will be no higher than 100 percent of the average price for that drug in comparable OECD countries, such as Canada, the UK, France, Germany, Japan, or Australia. HHS will update the fair price for each identified drug at least annually with a cap for inflation.
All profits pharmaceutical companies make from selling a drug above the fair price in the United States will be taxed at a rate of 100 percent. These funds will go directly back to consumers in the form of rebates.
- Pharmaceutical companies will be required to pay price increases back to the insurance company, who in turn must pass the rebate through to the consumer at the point of sale or as a mail-in rebate.
Harris will also end the pharmaceutical company tax loophole for direct-to-consumer advertising expenses.
- Advertising expenses by pharmaceutical companies have increased rapidly over the past two decades, from $1.3 billion (79,000 ads) in 1997 to $6 billion (4.6 million ads) in 2016. This aggressive advertising increases demand for new and expensive prescription drugs – and these actions should not be subsidized by taxpayers.
- The proceeds from ending these tax loopholes will be used to boost NIH funding for new treatments.
IF CONGRESS FAILS TO ACT WITHIN 100 DAYS, HARRIS WILL TAKE EXECUTIVE ACTION TO LOWER DRUG PRICES HERSELF:
The Harris Administration will launch an investigation of all major prescription drugs whose pharmaceutical companies are price-gouging patients.
- Using the fair pricing method described above, the Harris Administration will investigate prescription drugs that (1) are sold for a cheaper price in any comparable OECD country (2) increase their annual price by more than the cost of inflation, or (3) are new with no comparison price or drugs, and publicly release findings on whether a drug’s price is unfair.
For companies found to be price-gouging, the Harris Administration will directly intervene to increase access and lower the cost of their drug.
- Drug companies found to be price-gouging patients will receive a warning letter demanding they offer a price reduction on the drug within 30 days. All companies that fail to comply will face immediate regulatory action, including:
- DOJ Investigation of Predatory Pharmaceutical Companies: Harris will appoint an Attorney General who will prioritize investigations of abusive drug pricing practices to ensure pharmaceutical companies are not violating federal law or engaging in anti-competitive behaviors.
For the most egregious offenders of high-priced drugs whose research is based on taxpayer-funded R&D, Harris will “march-in” and license a company’s patent to lower the cost.
- If the actions outlined above are not sufficient to bring down an abusive price for drugs that resulted from publicly funded R&D, Harris will use existing authority under the Bayh-Dole Act to “march-in” and license a drug company’s patent to a lower-cost competitor.
- The Bayh-Dole Act provides the federal government this authority for drugs that resulted from publicly-funded R&D to ensure they are “available to the public on reasonable terms.” For example, the pharmaceutical giant Gilead Sciences currently lists its HIV prevention drug Truvada at over $20,000 a year, despite taxpayers footing a significant portion of the R&D funding that went into the drug’s development. Yet, the Trump Administration, which includes the former head lobbyist of Gilead Sciences as the head of White House drug policy, is currently seeking to end any potential use of march-in rights.
- Unlike Donald Trump, Harris won’t allow pharmaceutical companies to put excessive profiteering above public health. Harris will issue official guidelines for using “march-in” rights and other intellectual property laws that incorporate considerations of access, safety, affordability, and innovation—and she’ll invoke the authority to save lives and hold pharmaceutical companies accountable.