Legislation Filed to Save Taxpayers $500 Million
WASHINGTON–(ENEWSPF)–November 20, 2014 – Sharp increases in prices for many generic drugs were examined today at a Senate hearing where three pharmaceutical companies refused to testify.
Generic drugs, copies of drugs no longer protected by patents, historically have cost much less than brand-name prescription medicines. But federal records made public at the hearing show the price for 1,215 generic drugs increased 448 percent on average from July, 2013 to July, 2014. During that period, nearly 10 percent of all generic drugs more than doubled in price, according to the analysis of data from the Centers for Medicare and Medicaid Services.
“Drug companies have seen the opportunity to make a whole lot of money and they are seizing that opportunity,” said Sen. Bernie Sanders (I-Vt.), chairman of the Senate Subcommittee on Primary Health and Aging. “This is greed at work in the pharmaceutical industry.”
Sanders cited examples of dramatic price increases for generic drugs like Digoxin, a medication used to treat congestive heart failure. It went from $0.12 a pill in July of 2013 to $1.06 a pill this past June. The price for Divalproex Sodium ER, a migraine medication, went up from $0.27 a pill to $2.38.
The CEOs of three drugmakers – Illinois-based Marathon Pharmaceuticals and the Pennsylvania-headquartered Lannett Co. and Teva Pharmaceutical Industries – refused to testify at the hearing. Sanders and Rep. Elijah Cummings, ranking member of the House Oversight Committee, sent letters on Oct. 2 to those firms and 11 others as part of their investigation of price hikes.
In his testimony at the Senate hearing, Cummings said “some companies are exploiting monopolies and disruptions in supply to implement massive price increases in order to reap unconscionable profits.”
Sanders and Cummings today introduced legislation to cushion the impact on taxpayers when drugmakers raise prices at a rate greater than inflation. When that happens now, current law requires brand-name drug manufacturers to pay a rebate to Medicaid. The Medicaid Generic Drug Price Fairness Act would extend the provision to generic drugs.
The non-partisan Congressional Budget Office estimated the policy change would save taxpayers $500 million over 10 years.