U.S. Senators Reintroduce FAIR Drug Pricing Act Requiring Transparency Surrounding Drug Price Increases

Date: March 29, 2021 | Country: UNITED STATES | Region: NORTH AMERICA | Type: Policy | Keywords: #fairdrugpricingact #hhs #prescriptiondrugs #pricechanges #priceincreases #r&d #regulation 
#transparency

PRICENTRIC BRIEF:

  • United States Senators Tammy Baldwin (D-WI), Mike Braun (R-IN), Tina Smith (D-MN), and Lisa Murkowski (R-AK) have reintroduced the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act, bipartisan legislation that would require increased transparency from pharmaceutical companies that plan on increasing the prices of their drugs
  • Under the Act, pharmaceutical companies would be required to notify and submit to the U.S. Department of Health and Human Services (HHS) a transparency and justification report for any price increases on drugs that cost at least $100 by more than 10% in one year or 25% over three years, that details manufacturing and R&D costs, net profits attributable to the drug, the amount spent on marketing and advertising, and any other figures deemed appropriate
  • While the Act does not prohibit price increases, Senator Murkowski said, “Through the FAIR Drug Pricing Act, we deter aggressive increases in drug prices by requiring manufacturers provide a justification when they substantially increase their list price”

 

THE DETAILS

WASHINGTON, D.C., United States – United States Senators Tammy Baldwin (D-WI), Mike Braun (R-IN), Tina Smith (D-MN), and Lisa Murkowski (R-AK) have reintroduced the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act, bipartisan legislation that would require increased transparency from pharmaceutical companies that plan on increasing the prices of their drugs.

The Act would mandate drug manufacturers disclose and provide more information on any planned drug price increases, including research and development (R&D) costs, to boost transparency and provide taxpayers, consumers, and policymakers with more context about the costs and value of medicines.

Companies would be required to notify and submit to the U.S. Department of Health and Human Services (HHS) a transparency and justification report for any price increases on drugs that cost at least $100 by more than 10% in one year or 25% over three years.

The report needs to not only justify the price increase, but detail manufacturing and R&D costs, net profits attributable to the drug, the amount spent on marketing and advertising, and any other figures deemed appropriate.

The Act does not prohibit price increases but instead seeks to provide taxpayers notice of them and bring transparency to the market for prescription drugs, explained Senator Baldwin. However, Senator Murkowski said, “Through the FAIR Drug Pricing Act, we deter aggressive increases in drug prices by requiring manufacturers provide a justification when they substantially increase their list price. This bill takes direct action to ensure pharmaceuticals are affordable for those who need them.”

As it stands, the Act has backing from the Campaign for Sustainable Rx Pricing; National Multiple Sclerosis Society; Patients For Affordable Drugs; American Academy of Neurology; Blue Cross Blue Shield Association; The Medicare Rights Center; Marshfield Clinic Health System; National Committee to Preserve Social Security and Medicare; Citizen Action Wisconsin; Center for Medicare Advocacy; ACHP; American College of Physicians; and AARP.

Prescription drug prices have come under fire in the U.S. over the past few years, and federally, there’s been a push to control drug prices through a U.S. version of reference pricing that would peg the costs of the most costly drugs Medicare Part D based on those found in economically-similar nations.

Former President Donald Trump issued his Most-Favored Nation (MFN) rule, which has since been stalled by incumbent President Joe Biden. However, Speaker of the U.S. House of Representatives Nancy Pelosi recently noted that some provisions of H.R. 3 (the Elijah Cummings Lower Drug Costs Now Act), which seeks to benchmark drug prices in the U.S. through a form of reference pricing could be included in Congress’ infrastructure bill.

At the same time, U.S. Senator Bernie Sanders (I-VT), along with a coalition of Democratic Senators, has introduced a package of three bills aimed at “drastically” reducing prescription drug prices, which echo previous efforts by Trump and other policymakers to price U.S. drugs based off prices found in other countries and allow Medicare to negotiate drug prices.

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