Hillary
Clinton believes we need to get incomes rising so American families can
afford a middle class life. But too many American families and seniors
are being squeezed by rising drug costs – even as they have seen their
wages and incomes grow far too slowly for years. This is an issue that
affects every American family and individual. Every month, 90 percent of
seniors and around half of all Americans take a prescription drug. A
typical senior on Medicare spends over $500 per year out of his or her
own pocket on prescription drugs. And individuals with chronic health
conditions or serious illnesses can spend thousands of dollars each year
in out of pocket spending to afford their prescription drugs. The
largest pharmaceutical companies are together earning $80-$90 billion
per year in profits at higher margins than other industries, while
charging Americans thousands of dollars for new drugs – often at much
higher costs than in other developed nations. They’re receiving billions
of dollars in taxpayer support for basic research, but spending more on
marketing than R&D. Americans are having a hard time paying the
bill. According to a Consumer Reports survey in August, “one of out
every four people facing higher drug costs were also unable to afford
medical bills or medications; one in five said they missed a payment on a
major bill.”
Hillary Clinton believes we need to
promote competition and leverage our nation’s bargaining power to lower
drug costs on behalf of Americans. Hillary Clinton
believes that we need to hold drug companies accountable to lower drug
costs for Americans. And this isn’t a new fight for her. She fought
against special interests for affordable health coverage in the 1990s
and as a Senator. In her 2008 campaign, she called for allowing Medicare
to negotiate with drug companies to reduce prices and rein in costs.
She’s been committed to this fight throughout her career, and is
continuing it today.
That’s why Hillary Clinton is announcing a
plan to hold the pharmaceutical industry accountable and rein in drug
costs for American families. Her plan will demand a stop to excessive
profiteering and marketing by denying tax breaks for direct-to-consumer
advertising and demanding that drug companies invest in R&D in
exchange for taxpayer support – rather than marketing or excessive
profits. She will encourage competition to get more generics on the
market and create a Federal backstop for when there are excessively
high-priced drugs that face no competition. And for Americans struggling
with prescription drug cost burdens, she will cap what insurers can
charge consumers in out-of-pocket costs, putting money back in the
family wallet.
Hillary
Clinton will demand a stop to excessive profiteering and marketing
costs by encouraging innovation and new treatments from drug companies.
Her plan will:
Stop direct-to-consumer drug company advertising subsidies, and reinvest funds in research.
Almost every country in the industrialized world bans or severely
restricts direct to consumer advertising because it increases
prescription drug costs, and can include confusing, misleading or
incomplete information or exaggerated claims if not regulated
effectively. Clinton’s plan would eliminate corporate write-offs for
direct-to-consumer advertising, saving the government billions of
dollars over the next decade. She would use the proceeds to help invest
in research, by devoting the funds to help pay for making permanent and
simplifying the R&D tax credit. And going forward, Clinton’s plan
would establish a mandatory FDA pre-clearance procedure for these ads
funded through user-fees paid for by pharmaceutical manufacturers in
order to be sure that the ads provide clear and understandable
information to consumers.
Require drug companies that benefit from taxpayers’ support to invest in research, not marketing or profits.
For years, Hillary Clinton has made the case that Americans should get
the value they deserve for the billions of dollars in support they
provide through federal investment in basic research and incentives for
R&D. Drug companies should not be allowed to reap excessive profits
or spend unreasonable amounts on marketing if they want to receive
support that is designed to encourage life-saving and health-improving
treatments. Clinton’s proposal would require pharmaceutical companies
that benefit from federal support to invest a sufficient amount of their
revenue in R&D, and if they do not meet targets, boost their
investment or pay rebates to support basic research. If elected
President, she will convene business leaders, experts on drug pricing,
and consumer advocates to set new parameters for federal support in
order to ensure this requirement. The basic principle is based on a
provision of the Affordable Care Act that required insurance companies
to pay rebates to consumers if their profits and administrative costs
were an excessive share of benefits actually paid out to consumers.
Hillary
Clinton will lower costs for Americans by limiting out-of-pocket
spending, increasing competition, and demanding value for their
purchase:
Cap monthly and annual out-of-pocket costs for
prescription drugs to save patients with chronic or serious health
conditions hundreds or thousands of dollars.Americans should be
able to afford prescriptions for their conditions throughout the year,
and not have to stop taking a needed medication. Following the example
of states like California and Maine, Clinton’s plan will require health
insurance plans to place a monthly limit of $250 on covered
out-of-pocket prescription drug costs for individuals to provide
financial relief for patients with chronic or serious health conditions,
ensuring Americans can get the care their doctors prescribe. The cap
would apply to prescriptions covered by insurance that are specifically
approved by FDA for the treated condition. Up to a million Americans
could benefit from this proposal every year.
Increase competition for prescription drugs, including specialty drugs, to drive down prices and give consumers more choices.
Hillary Clinton’s plan will increase competition for traditional
generics and generic versions of specialty drugs such as newer
“biologics:”
- Clear out the FDA generic backlog:
Clinton’s plan will fully fund the FDA’s Office of Generic Drugs to
clear out their multi-year generic drug approval backlog, which has kept
competitors off the market, and can help lower overall prescription
drug prices.
- Increase competition for specialty drugs including new “biologic” drugs – which are often the most expensive new treatments:
Specialty drugs, such as biologics, have provided new treatments and
improved health for people suffering from chronic illnesses such as
rheumatoid arthritis, Crohn’s disease, and multiple sclerosis, and
people suffering from serious illnesses such as cancer. But often these
drugs are the only ones on the market - and with no competition to keep
the price down, drug companies can charge excessive prices. Clinton’s
plan will increase competition for new treatments derived from
biological sources by encouraging generic versions. Lowering the
biologic exclusivity period from 12 to 7 years will spur greater
competition and save up to $5 billion for the federal government over 10
years. This is especially important because biologics are often the
most expensive new drugs, such as new heart disease treatments, which
may cost $10,000 per year. The FDA should also give prioritized,
expedited review to biosimilar applications that only have one or two
competitors in the marketplace (situations where such drugs are most
likely to be excessively priced).
Prohibit “pay for delay” arrangements that keep generic competition off the market.
Hillary Clinton would prohibit “pay for delay” agreements that allow
drug manufacturers to keep generic competition off of the market –
lowering prices for Americans, and saving the government up to $10
billion.
Allow Americans to import drugs from abroad – with careful protections for safety and quality.
Hillary Clinton believes that it’s unfair that drug companies charge
far lower prices abroad for the same treatment, while imposing higher
prices on Americans. Countries in Europe often pay half of what
Americans pay for the same drugs. Clinton would allow Americans to
safely and securely import drugs for personal use from foreign nations
whose safety standards are a strong as those in the United States. The
FDA and other regulatory agencies would set careful standards for
re-importation to ensure safety and quality for Americans.
Ensure American consumers are getting value for their drugs.
Clinton’s plan will ensure that new drugs coming on the market provide
value and high quality to consumers, rather than adding to cost without
improving treatments and outcomes. Clinton recognizes that new drugs can
constitute incredible breakthroughs in treating diseases from Hepatitis
C to cancer to heart disease – and we need to ensure that there are
proper incentives for real innovations that bring effective products to
market. Clinton believes that Americans should not face extreme costs,
or pay too much for drugs that do not in actuality improve on available
treatments. She has a long and strong record of supporting the
evaluation of the value, quality, and comparative effectiveness of new
drugs. That’s why she’ll build on provisions in the Affordable Care Act
that invest in private research, and other private efforts, to use the
results of private-sector analyses to hold drug companies accountable
for justifying their costs and ensure Americans pay drug prices that
reflect the improved value new treatments provide.
Hillary Clinton will leverage America’s negotiating power as a backstop.
Where
competition alone isn’t enough to hold pharmaceutical companies
accountable and drive prices down, Hillary Clinton’s plan would leverage
America’s strong bargaining power to demand higher rebates and lower
costs from drug companies. Her plan will:
Demand higher rebates for prescription drugs in Medicare.
To contain the cost of prescription drugs for low-income individuals,
people with disabilities, and seniors, Hillary Clinton’s plan will
require drug manufacturers to provide rebates for low-income Medicare
enrollees that are equivalent to rebates in the Medicaid program. Under
current law, the rebates offered in the Medicaid program are more
generous than those offered in Medicare. Hillary Clinton would require
pharmaceutical companies to provide higher rebates in the Medicare
low-income subsidy program, ensuring that rebates are at Medicaid
levels. This would save more than $100 billion in Medicare costs.
Allow Medicare to negotiate drug and biologic prices.Hillary
Clinton has long believed that Medicare should use its leverage with
more than 40 million enrollees to negotiate and drive down drug and
biologic prices for seniors and others in the program. Today, drug
prices in Medicare are negotiated by a disparate set of benefit
managers, rather than using the full bargaining power of the program.
Clinton believes that we should drive the best bargain for Americans,
and especially for senior citizens, by allowing Medicare to negotiate
drug prices, notably for high-cost drugs with limited competition.
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