Wyden Announces Steps to Rein in Prescription Drug Prices
Washington, D.C. – Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore., today introduced a bill, the SPIKE Act, to rein in the alarming trend of pharmaceutical companies dramatically increasing the prices of their drugs each year. The bill would require companies to explain the reasons for exorbitant price hikes to the public. Senator Wyden today also re-introduced the RxCAP Act, which would place a cap on the out-of-pocket costs seniors in Medicare Part D pay for prescription drugs.
“Americans are sick and tired of seeing the cost of their prescription drugs race past their paychecks,” Wyden said. “Drug companies that increase their prices by double or even triple digits every year ought to be accountable to American families and taxpayers.”
Wyden’s bill would require the Health and Human Services Department (HHS) to notify drug manufacturers when their drug’s price has increased passed certain benchmarks. One benchmark seeks to address modestly-priced drugs whose prices are unreasonable increased, targeting actors such as Turing Pharmaceuticals, which increased the price of Daraprim by 5,000%. The other benchmark seeks to address drug price increases that effect Medicare and Medicaid the most, even if the increases are less dramatic.
Drug manufacturers that surpass the benchmark would be required to submit a publically available justification explaining why the price was raised, in addition to other information that may include how much was spent on researching and developing the drug, how much was spent on marketing and advertising, and other factors. If a drug manufacturer seeks to avoid justifying their price increase, they may do so by lowering their drugs price below the benchmark.
In addition to the SPIKE Act, Wyden re-introduced the RxCAP Act, which would eliminate all cost-sharing for Medicare Part D beneficiaries above the current out-of-pocket threshold of about $8,000. A similar out-of-pocket cap exists in all other aspects of America’s health care system, including the employer-provided market, the individual market, Medicaid, and Medicare Advantage. Earlier this year, Wyden also introduced the C-THRU Act, would take several steps to improve transparency among pharmacy benefit managers (PBMS) and ensure seniors in Medicare receive a fair share of rebate savings.