Hillary Clinton will take aim at pharmaceutical companies on Tuesday when she unveils a plan to lower prescription drug prices.
Clinton’s plan, previewed to CNN by campaign aides, would reform the way drug companies do business, particularly by stopping them from spending government grants on advertising and by allowing Medicare — and the U.S. government — to negotiate down prescription drug costs.
Clinton has made prescription drug costs part of her regular stump speech of late, telling audiences in New Hampshire, Iowa and elsewhere that getting costs under control would be a key part of her plan to “build on” the Affordable Care Act, President Barack Obama’s landmark health care law.
“This week I am announcing a detailed plan to crackdown on these expenses,” Clinton said Monday in Baton Rouge, Louisiana.
The drug prices plan, which Clinton will unveil during a community meeting in Iowa, would “would eliminate corporate write-offs for direct-to-consumer advertising” that “can include confusing, misleading or incomplete information or exaggerated claims if not regulated effectively,” according to the fact sheet.
Clinton will also require drug companies that benefit from government support for research and development “to invest a sufficient amount” in research and development if they want to continue receiving government money. The fact sheet did not specify what qualified as a “sufficient amount.”
The plan tracks with what Clinton has said about Obamacare in the past: That she supports the law whole-heartedly, but feels tweaks and changes are needed.
Clinton’s new plan will also tweak Obamacare’s mandate on insurance companies, requiring that they limit the amount of money someone can spend monthly on prescription drugs to $250 on cover out-of-pocket drugs.
To get drug prices down, Clinton will bank on the federal government’s large purchasing power to influence drug companies to provide higher rebates to Medicaid and would allow programs like Medicare to negotiate with pharmaceutical companies as a single 40 million person entity, rather than a series of smaller groups.
“As your president, I want to build on the progress we made,” Clinton said of the health care law Monday, calling healthcare not just a political issue but a moral one, too.
Clinton previewed her plan briefly on Twitter Monday, saying that “price gouging like this in the specialty drug market is outrageous.”
The tweet reverberated on Wall Street, causing biotech stocks to tumble.
Later Tuesday, Clinton’s closest Democratic opponent, independent Vermont Sen. Bernie Sanders, rolled out his own prescription drug plan, calling for more transparency on pricing and for allowing Americans to import drugs from Canadian pharmacies.
“The pharmaceutical industry has become a health hazard for the American people,” Sanders said in a statement. “The time is long overdue for Congress to listen to the needs of the American people and not the enormously-profitable pharmaceutical industry.”
Like Clinton’s plan, Sanders’ proposal would allow Medicare to bargain directly with drug companies. But it would also require drug companies to report information that impact their prices and increase the penalties against drug companies convicted of fraud.
Sanders would also require generic drug companies to rebate money to the government if their prices go up higher than inflation, a seemingly direct shot at Turing Pharmaceuticals, a company that recently raised the price on a drug that fights parasitic infections and is used by some AIDS and cancer patients, by over 4,000%.