A new bill, the Fair Drug Pricing Act, was introduced in both the Senate and the House this month promising to bring greater transparency to increases in drug prices.
If passed, the bill would require drug manufactures to notify the U.S. Department of Health and Human Services (HHS) 30 days before the price of any drug is increased by more than 10 percent. In addition to notification, pharmaceutical companies would also have to provide a report to HHS outlining their justification for the price increase as well as information on manufacturing, research and development costs for the qualifying drug, net profits attributable to the qualifying drug, marketing and advertising spending on the qualifying drug, and other information as deemed appropriate.
While the bill would not prohibit drug manufacturers from increasing the costs of prescription drugs, it would, for the first time, give the public advance notice about increases and deeper insight into why the increase is happening.
The Medicare Rights Center offered feedback on portions of the bill and supports this first step toward addressing high drug prices. According to a fact sheet released by the bill sponsors, “Part D costs continue to increase considerably faster than other parts of Medicare. According to CMS, about 540 prescription drugs covered by Medicare Part D had increases in cost-per-unit of at least 25% during 2014. The taxpayer-funded Medicare Part D program saw its total drug costs increase from $104 billion to $121 billion between 2013 and 2014.”
Senator Tammy Baldwin (D-WI) and Senator John McCain (R-AZ) introduced the bill in the Senate, and Representative Jan Schakowsky (D-IL) introduced the bill in the House.