A Plan to Slash Drug Prices and Boost Medical Innovation
We are living in a golden age of medical innovation. Medicines have vastly extended life expectancy for people with Hodgkin's lymphoma and cystic fibrosis, protected us from many viruses and certain cancers, and put us within reach of ending the AIDS epidemic for good.
Yet, far too many of us are denied access to the benefits of these breakthrough treatments and potentially life-saving medicines.National Academy of Sciences. “Making Medicines Affordable: A National Imperative.” 2017. Drugs in the United States are more expensive than drugs anywhere else in the world.Langreth, Robert. “Quick Take: Drug Prices.” Bloomberg. February 5, 2019. Americans pay an average of $600 a year more for prescription drugs than residents of most other developed countries.Organization for Economic Cooperation and Development. “Pharmaceutical spending.” While millions of Americans struggle to pay for medicine, pharmaceutical companies are enjoying record profits and remain the most profitable companies in the entire health industry.Herman, Bob. “Axios analysis: Drugmakers are getting richer.” Axios. May 13, 2019.
Drugs are more expensive in the United States than anywhere else in the world
Time and time again, Washington has proven that it’s either uninterested or incapable of addressing this problem—with real-life consequences. Nearly one in four Americans struggle to pay for medicine.Garber, Adam, Kilpatrick, Lance, Matthew, Reuben. “The real price of medications: a survey of variations in prescription drug prices.” U.S. Pirg. 2019. Three in ten skip doses or forgo filling prescriptions because they can’t afford them.Kirzinger, Alex. “KFF Health Tracking Poll - February 2019: Prescription Drugs.” Kaiser Family Foundation. March 1, 2019. Families across the country face difficult choices: medicine or child care for my two-year-old? Medicine or making rent on time? Medicine to treat my diabetes or to control my cholesterol?
Families across the country face difficult choices: medicine or child care for my two-year-old? Medicine or making rent on time? Medicine to treat my diabetes or to control my cholesterol?
It’s time for a new era of leadership ready and eager to make drugs affordable and take on pharmaceutical companies. Pete has the courage to break with the status quo by focusing on real solutions that will lower costs and make needed—even life-saving—prescription drugs available to all Americans.
Pete’s Affordable Medicines for All plan dramatically reduces prescription drug costs, forces pharmaceutical companies to price responsibly and pay their fair share, and encourages innovation in new medicine manufacturing, financing, and delivery.
Pete's plan will:
Pete’s Medicare for All Who Want It plan gives everyone the option of getting insurance coverage through an affordable and comprehensive new public insurance plan. To ensure affordable medicines, the federal government will be able to negotiate lower drug prices with pharmaceutical companies on behalf of the public plan. It will also offer an affordable prescription drug benefit package that caps monthly out-of-pocket drug spending under $250.
Currently, when Medicare pharmacy benefit (Part D) beneficiaries reach their catastrophic coverage threshold, they are still required to pay 5% of drug costs. This means that there’s actually no limit on what a beneficiary can pay for prescription drugs. Pete will work with Congress to place a monthly cap on Part D out-pocket costs of $200 and a maximum cap on annual Part D out-of-pocket spending of $2,400. Seniors with lower incomes will have lower caps, as they are eligible for subsidies.
Generic drugs make up 90% of the total prescription drug volume sold in the United States.IQVIA. “Medicine use and spending in the U.S.” May 9 2019. Pete supports eliminating co-payments on all generic drugs covered under Medicaid, and for low-income individuals in the public plan and Medicare. Pete also supports identifying additional incentives to encourage clinicians, hospitals, and pharmacies to use generic drugs whenever clinically appropriate.Dusetzina, Stacie, Shelly Jazowski, Ashley Cole, Joehl Nguyen. “Sending the wrong price signal: why do some brand name drugs cost Medicare beneficiaries less than generics?” Health Affairs. July 2019.
Corporate health care prioritizes profits over people—and so have politicians in Washington. Congress currently bars the federal government from negotiating for lower drug prices with pharmaceutical companies. Pete will empower the federal government to negotiate down the price of drugs on behalf of people covered by Medicare and the public plan.Cubanski, Juliette, et al. “What’s the latest on Medicare drug pricing negotiations?” Kaiser Family Foundation. July 23, 2019. This is a proposal with multi-stakeholder support. Pharmaceutical companies will be heavily penalized if they refuse to participate in negotiations or leave the negotiation before a fair price is agreed upon. The first drugs for negotiation will include those to treat diabetes, asthma, arthritis, HIV, and cancer.
Patents are a privilege guaranteed by the American people to innovators. Pharmaceutical companies found abusing that privilege through irresponsible pricing should face real consequences. Under certain circumstances, the federal government has the power to acquire intellectual property rights from pharmaceutical companies. For “worst offender” pharmaceutical companies that price in a way that harms patients by making drugs unaffordable, as in when attempts at direct negotiation are rebuffed or in cases of a natural disaster or national public health emergency, Pete will judiciously exercise these rights to take away patents.
In June 2019, Jesmiya David Scherer-Radcliff, a 21-year-old from Minnesota who lived with diabetes, died while rationing his insulin. He could not afford this life-saving drug despite working two jobs. At least five others have died under similar circumstances. Young people are dying from lack of access to insulin that is too expensive to manage their diabetes, a disease they didn’t cause and a daily treatment they can’t live without. This is a uniquely American tragedy. A vial of insulin that costs us $320 is available in Canada for $30; in Italy, the same vial is free.
As millions of Americans struggle to pay for drugs, pharmaceutical companies are getting richer and richer, remaining some of the most profitable companies in the health care industry. Pete will increase the annual Branded Prescription Drug Fee on drug manufacturers and importers.Internal Revenue Service. “Annual fee on branded prescription drug manufacturers and importers.” 2015. The revenue collected by this fee will be used to help fund American’s access to affordable prescription drugs.
In the first six months of 2019, pharmaceutical companies increased prices for 3,400 drugs; the average increase was five times the rate of inflation.Picchi, Aimee. “Drug prices in 2019 are surging with hikes at five times inflation.” CBS News. July 1, 2019. Pete wants to protect people against unexpected price increases. Pete will implement pricing protections against outrageous drug price inflation in Medicare and the public plan. Every quarter, branded pharmaceutical companies would be required to pay a rebate for drugs that increase faster than inflation.
Pete will broaden current federal incentives that support research for drug development that prioritizes unmet needs. As a matter of national security, Pete also supports investing in expanding American drug manufacturing capacity for essential drugs, especially those either prone to shortages and quality problems, or dependent on foreign production.
Pete will establish a national All-Payer Claims Database so patients, providers, and insurers better understand medication cost and quality.Calsyn, Maura. “Policy options to encourage all-payer claims databases.” Center for American Progress. April 20, 2018 Further, all pharmaceutical companies with an agreement to sell prescription drugs to public plans, as well as pharmacy benefit managers that oversee the prescription drug benefit, will be required to report to the federal government information related to their balance sheets, including sales and spread pricing.Dusetzina, Stacie, Bach, Peter. “Prescription drugs- list price, net price, and the rebate caught in the middle.” JAMA Network. March 6, 2019. Royce, Trevor, Kircher, Sheetal, Conti, Rena. “Pharmacy benefit manager reform.” JAMA Network. June 20, 2019.
Pete will empower federal agencies to better secure the quality and safety of drugs destined for American consumption, including by improving systems that regulate medicines coming from abroad. This will entail increasing inspection staff, evaluating the safety of imports, and bolstering tracing initiatives.
Our health care system should prioritize people over profit. Safe and affordable medicine should be an American right. If you’re with us, text MEDICINE to 25859.
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