The bill goes after a drug's list price, how much an uninsured patient will pay for a drug without any discounts or rebates to help bring the cost down. (Photo: Shutterstock)
If Senators Cory Booker, D-New Jersey, and Bernie Sanders, I-Vermont, have their way, a new federal agency would have the mission of controlling drug prices.
The Hill reports that the senators' proposed legislation, the Prescription Drug Affordability and Access Act, would form the Bureau of Prescription Drug Affordability and Access. Senator Kamala Harris, D-California, has signed on as a cosponsor.
The bill goes after a drug's list price, how much an uninsured patient will pay for a drug without any discounts or rebates to help bring the cost down.
And it hits drug manufacturers where it would hurt: any company violating its requirements. In order to bring a new drug to the market, manufacturers would have to provide plenty of cost data to the new bureau, including the cost of research and development, the cost of the drug and of comparable medications in other countries and the federal investments that contributed to the drug's discovery and production.
Based on that information, the bureau—not the manufacturer—would then set the appropriate list price for the drug.
Companies failing to satisfy these requirements would find the drug stripped of its exclusivity provisions so that generic manufacturers could immediately start making their own versions of the drug.
While there's been plenty of talk about bringing down drug prices, no substantive actions have yet been taken by either party, although this bill would be the most drastic effort thus far. What kind of chance it stands remains to be seen, although much more modest efforts have either died in the Senate or failed to garner any bipartisan support.
But should it gather steam, it wouldn't be the first such effort. The idea is borrowed from Canada, which has a Patented Medicine Prices Review Board.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
