NJ lawmaker: Force drug companies to negotiate lower prices
If you take any kind of prescription drug, you know prices keep climbing higher and higher.
A congressman from New Jersey wants to turn things around.
U.S. Rep. Frank Pallone, D-N.J. 6th District, is sponsoring the Lower Drug Costs Now Act, which he says will stop drug companies from ripping off patients.
The Lower Drug Costs Now Act calls for the federal government to have the authority to negotiate drug prices directly with pharmaceutical manufacturers and would stipulate that the maximum price could be no higher than 1.2 times what is charges in six other major countries.
“The government is going to negotiate prices initially under Medicare but then that price that we negotiate will be used for everyone," Pallone explained. "In other words, it won’t matter if you’re a senior on Medicare or not.”
The proposed measure would also create a $2,000 out-of-pocket limit on prescription drug costs for Medicare beneficiaries.
The law would be for patented drugs sold through a brand name, not generic drugs.
According to the New Jersey Health Care Quality Institute, the average annual cost of prescription drugs rose nearly 58% from 2012 to 2017. About a quarter of New Jersey residents don’t take their medication as prescribed because costs are so high.
“If you’re someone that doesn’t have insurance or has a high deductible, you could be paying thousands and thousands of dollars for a drug on an annual basis," Pallone said, adding that it's one of the concerns that he hears the most about from constituents.
Pallone said prescription drug companies often charge Americans three to 10 times more for drugs than they do for patients in Canada, Australia, Japan and in Western Europe.
He said if the drug companies don’t agree to this kind of a negotiated price, they could lose 65%-95% of their gross sales.
Pallone said the idea is not radical.
“We negotiate drug prices for the Veterans Administration, for the military, for the Indian Health Service, and every other country does this," he said.
Pallone said he doesn’t see this as a big deal for drug manufacturers, “but it will be a big deal in terms of actually driving down costs.”
Pallone said he believes the legislation will be passed soon because it’s endorsed by the Democratic leadership in Congress and President Donald Trump has indicated support for it.