Our next President yesterday gave more specifics about her new plan to keep life-saving drugs and other prescription medicines affordable than her opponent has said about all of his policies all summer. Responding to big price hikes for the EpiPen and other pharmaceuticals, Hillary Clinton says she will work with federal agencies, patient advocates, medical experts, and state and local officials to crack down on “unjustified, outlier” price increases, which she defines with three criteria:
An unjustified price increase would be determined by a review of criteria including: 1) the trajectory and scope of the increase in price; 2) changes in the cost of production; and 3) the treatment’s relative value to patients, among other factors that give rise to threatening public health [Hillary Clinton campaign website, “Hillary’s Plan to Respond to Unjustified Price Hikes for Long-Available Drugs,” posted 2016.09.02].
Clinton would also have the government purchase and provide generic alternative drugs, import foreign alternative drugs, and penalize price-gougers. Longer-term, Clinton would require insurers to cap monthly out-of-pocket payments for prescription drugs, speed up FDA approval of generic drugs, ban agreements that drug manufacturers use to delay production of generic alternatives, eliminate corporate write-offs for drug ads, require pharmaceuticals receiving federal support for research and development to invest certain amounts of their own money in R&D, and finally fix the hole the second President Bush left in the Medicare drug benefit by allowing Medicare to negotiate drug prices.
But I’m particularly intrigued by this idea of forbidding “unjustified, outlier” price increases. Our Public Utilities Commission has the power to do that with prices for electricity and telecom services; why not require drug companies to do the same with their vital products? If a drug company can show that ingredients or production equipment or shipping costs more or that they’ve improved the drug to cure more cases or reduce side effects, then sure, let them charge more. But if they can’t show increased production or distribution costs or increased value for customers, they don’t get to soak sick people in a monopolized market.