Yet another politician has seen enough big price hikes. Following a similar recommendation from Democratic nominee Hillary Clinton, a Connecticut congressional rep backed a pricing panel to crack down on the industry’s “bad actors.”
Rep. Rosa DeLauro (D-CT) plans to introduce a bill next month to set up a “national review board” that would punish “excessive” price hikes by issuing fines, shortening monopolies and clawing back previous tax benefits. The board would include representatives from multiple government agencies who would watch over both pharma and medical device prices.
As DeLauro puts it, companies benefit from “taxpayer-sponsored research, our skilled workforce, our infrastructure, and tax incentives, only to then gouge those same taxpayers--putting life-saving medicine out of reach for many.”
She cited the recent furor about Mylan’s ($MYL) EpiPen price hikes as evidence that more pricing oversight is needed. The hikes were “irresponsible, inexcusable, and dangerous,” she said. But Mylan isn’t alone, as industry-watchers know. DeLauro offered other price hike examples from Turing and Valeant ($VRX), while also highlighting expensive Gilead Sciences ($GILD) drugs.
DeLauro’s proposal for regulating drug and device prices runs similar to Clinton's. Last month, the presidential candidate proposed a panel composed of government personnel and citizen advisers to look for “outlier” price hikes. Then, to punish companies, the board could issue fines or authorize emergency importation of pricey products, among other options.
While voters may approve of Clinton's panel--and her slate of other ideas, including Medicare price negotiation--Pfizer ($PFE) CEO Ian Read hasn't reacted to her announcements favorably. At a conference shortly after the most recent announcement, he said Clinton's system would be “very negative for innovation.” He added that the approach “drives you to a one-payer system, it drives you to rationing, drives you to a place where most consumers don’t want to be.”
Amid the developments, Evercore ISI policy analyst Terry Haines published some of his own thoughts, arguing that a “citizen panel” proposed by Clinton wouldn’t “survive a bipartisan legislative process.”
“Anything like this would require Congress to create it, not Clinton to decree it,” Haines wrote in a note at the time. “There certainly will be no action on drug pricing in any form, including this one, before mid- to late 2017, and only then as part of broader ACA reform.”
The bill is far from DeLauro’s first foray into pharma affairs. In the past, she has blasted the FDA for approving drugs based on Phase II data or pivotal trials with small enrollments. She’s also introduced legislation to prohibit DTC advertising for a drug for three years after its launch.
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Editor's note: A previous version of this story cited Bristol-Myers Squibb price increases among those Rep. DeLauro questioned; that was based on erroneous information in a release about the bill that has since been corrected.