Bernie Sanders proposes price caps on drugs developed with federal funds

After becoming chairman of the powerful Senate Health, Education, Labor and Pensions Committee earlier this year, Sen. Bernie Sanders, I-Vermont—a longtime opponent of Big Pharma—has become even more ubiquitous in his efforts to reduce drug prices.

His most recent push is to mandate price caps for drugs that were developed with the help of government funding.

In a Senate draft reauthorization (PDF) of the 2006 Pandemic and All-Hazards Preparedness Act, Sanders proposes that the U.S. price of a product developed with support from the Centers for Disease Control and Prevention or the Biomedical Advanced Research and Development Authority must not exceed the lowest price charged for it in Canada, France, Germany, Italy, Japan or the U.K.

This move would essentially leave the U.S. price of government-developed drugs in the hands of regulators in Europe, who assess therapies by way of cost-benefit analysis. This system keeps prices in check, much more so than in the U.S., where there is no such analysis.

Sen. Bill Cassidy, M.D., R-Louisiana, a former physician who is the ranking member of the HELP committee, disagrees with Sanders’ proposal, calling it “price setting.”

Sanders’ plan would “hack away at the entire system for the possibility of short-term benefit,” Cassidy wrote in an op-ed in Stat. “Addressing these underlying problems will preserve the incentives to invest in innovation.”

Meanwhile, not all of Sanders’ recent efforts have been in opposition to Big Pharma. He is pushing for an insulin price cap that would impact insurers more than the companies who make the drug.

Sanders also has joined Cassidy in targeting reform of pharmacy benefit managers—third-party players who gain more from industry rebates than patients do. The rebates also help manufacturers of branded drugs lessen competition by limiting patient access to cheaper alternatives.