OnDemand WTP Pricing Research

FAIR Drug Pricing Act will force drug cos to justify drastic price hikes | CNBC

In today’s polarized political environment, it’s hard to find any issue that an Illinois Democrat and a Florida Republican can agree on. Here’s one: the skyrocketing costs of prescription drugs are a scourge that must be dealt with as soon as possible.

Drug companies are making record profits and at the same time raising the prices of life-saving prescription drugs more and more every day. What’s worse, drug companies have no legal obligation to justify or explain the massive spikes in drug prices.

While there is no one magic bullet to bringing down prescription drug costs, we believe that requiring transparency in drug pricing is an important step forward. Today, Rep. Francis Rooney has signed on to H.R. 2439, the FAIR Drug Pricing Act, a bill that takes the first step in addressing skyrocketing prescription drug prices by requiring basic transparency for pharmaceutical companies that drastically spike the price of a drug.

With Mr. Rooney’s co-sponsorship, the bill is now bipartisan in both the House, where Rep. Jan Schakowsky is the lead sponsor, and in the Senate, where it enjoys the support of Sen. Tammy Baldwin of Wisconsin and Sen. John McCain of Arizona.

The FAIR Drug Pricing Act, whose initials stand for “Fair Accountability and Innovative Research,” would require drug companies to give notice and justification for raising the price of a drug more than 10 percent at one time or more than 25 percent over three years.

“We believe that consumers have a right to know whether drug companies are spiking the costs of their medications because they’re spending more on research and development or simply because they can.”
For each price increase drug companies would have to tell the public what they spent on manufacturing, research and development costs for the qualifying drug, net profits attributable to the qualifying drug, and marketing and advertising spending on the qualifying drug.

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FAIR Drug Pricing Act will force drug cos to justify drastic price hikes.