Yesterday, Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) introduced three bills to address the cost of prescription drugs. The legislative package would open up generic competition to patent-protected U.S. brand-name drugs that are deemed “excessively priced,” allow Medicare to negotiate directly with drug manufacturers, and would allow consumers to import lower-priced medications from Canada.
As we have reported, the Trump Administration introduced its own plan last year for reducing drug prices. However, while the Sanders-Cummings bills would apply to any U.S. patent-protected brand-name drug regardless of whether government programs cover its costs, President Trump’s international pricing proposal would not apply to retail pharmacy drugs purchased by Medicare beneficiaries or to medications for privately insured people.
Under the Sanders-Cummings proposal, drugs deemed “excessively priced” by the Department of Health and Human Services (HHS) could face generic competition. A medication’s cost would be deemed “excessive” if its price in the U.S. is higher than the median price in Canada, the United Kingdom, Germany, France, and Japan. If the drug maker is unwilling to cut its U.S. price, then the government could allow a more affordable version of the drug to be produced by a generic manufacturer, which would be required to pay “reasonable” royalties to the pharmaceutical company that holds the patent.
The legislation could make progress in the House, as Democrats have made controlling rising drug prices a priority. In addition, Rep. Cummings chairs the House Oversight and Government Reform Committee, which is planning to take a major role on drug pricing issues. We will keep you updated.