Recognizing that government intervention is needed to rein in some drug prices, Hillary Clinton has proposed a plan to help ensure people in the U.S. can afford their life-saving medications, if she’s elected president. This new plan supplements her proposals for reining in drug prices more generally, establishing a panel to oversee the price of critical drugs. The panel would be empowered to penalize drug companies that hike prices substantially on life-saving drugs that have been available at far lower prices for a long time; it could also make reasonably priced drugs available.
While Clinton should be commended for bringing the issue of high drug prices into the spotlight of the presidential campaign, the devil is in her plan’s details. Practically, it’s hard to see how her proposal gets implemented in a way that serves the public interest. You can imagine a panel debating what it means for a drug price to increase substantially or how long a drug has to have been on the market for the panel to address its steep price. The efficacy of the oversight panel turns on who sits on it and panelists’ sense of what the right price of a drug should be.
Clinton is proposing panelists from the public health and consumer protection worlds, but her executive authority is limited. Arguably, most of Clinton’s enforcement tools require Congressional action. Congress would need to pass legislation establishing a panel to impose penalties on drug companies that raise prices on drugs too high. And, it would have to ensure the panelists were chosen for their independence, a stretch to say the least.
Congress has never been inclined to take action to rein in the price of drugs even though drug price negotiation is a top policy priority for Americans, so it’s hard to see why it would now. Members feign concern about prices and fail to act claiming they don’t want to stymy drug companies from innovating; PhRMA’s largesse when it comes to campaign contributions is formidable.
Presumably, Clinton has authority to have the FDA lift its ban on importation of drugs from abroad for personal use to ensure their affordability. But, it’s unclear how much help that would be. While it is illegal to import drugs from abroad for personal use today, millions of people already do so in order to afford their medications. No one stops them. And, the FDA has never prosecuted a person for so doing.
Also, the Bayh-Dole Act already gives the US government the executive authority to limit the price of many drugs that were developed with federal funds, though the government has never chosen to use its authority in the past 35 years under Democratic or Republican administrations. A Clinton administration arguably could choose to use its executive authority under Bayh-Dole or through a newly energized Consumer Financial Protection Bureau to ensure drug prices are reasonable.
The question remains whether there’s steak in Clinton’s proposals or are they all sizzle?
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