Fair Pricing Drug Act

Health
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Policy Proposal: Fair Pricing for Prescription Drugs Act

Objective: To ensure that pharmaceutical companies do not charge higher prices for prescription drugs in the United States than they charge in other comparable nations, reducing the financial burden on U.S. citizens while preserving access to necessary medications.

Policy Overview

The Fair Pricing for Prescription Drugs Act aims to establish price parity for pharmaceuticals sold in the United States by requiring that drug prices not exceed the lowest price offered in any other nation. The goal is to protect American consumers from excessive costs, discourage medical tourism for cheaper medications, and promote equitable access to life-saving drugs.

Key Provisions

1.	Price Benchmarking:
  •   Establish a “Price Parity Index” based on the average drug prices in other nations. 
  •   Pharmaceutical companies must cap U.S. drug prices at the lowest price charged in other nations for the same product.
2.	Mandatory Transparency:
  •   Drug manufacturers must publicly disclose the pricing of their products across all markets where they are sold.  Drug manufacturers must disclose their development cost and profit margin on each drug manufactured.  

  3.	Enforcement Mechanism:
  •   The U.S. Department of Health and Human Services (HHS) will oversee compliance and impose penalties for violations, including fines or restrictions on market access for noncompliance.
4.	Reinvestment in Innovation:
  •   A portion of the savings generated from lower drug prices will be reinvested into domestic biomedical research and development through federal grants and public-private partnerships.
5.	Consumer Protections:
  •   Prevent pharmaceutical companies from withdrawing or limiting the availability of drugs in the U.S. market in response to the policy.
  •   Provide mechanisms for expedited drug imports from approved countries in cases of price gouging or supply shortages.

Benefits

• Financial Relief for Consumers: Reduces out-of-pocket costs for medications, particularly for seniors and low-income populations.
• Global Price Equity: Aligns U.S. drug prices with international standards, addressing longstanding disparities.
• Reduced Medical Tourism: Limits the need for Americans to travel abroad for affordable prescriptions.
• Encourages Accountability: Promotes pricing transparency and deters exploitative practices by pharmaceutical companies.

Expected Outcomes

By aligning drug prices in the U.S. with international standards, this policy ensures that American citizens are no longer subjected to disproportionately high pharmaceutical costs. It balances consumer protection with support for innovation, creating a fairer and more sustainable healthcare system.

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Effectively granting each US citizen “most favored nation” status. Sounds good.

As a bonus, it’ll hasten the death of Europe’s socialized medicine, which oughtta wake some of them up.

I think that stopping patent evergreening and ending patents on drugs developed with public funds would go a long way to fixing things as well.

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Please realize that public funding for drug development tends to end long before the drug is ready for market. Currently the licensee completes the drug development, conducts the Phase 1, 2 & 3 trials and wades through the FDA regulatory morass. Without some guarantee of exclusivity few companies would take the risk to make this investment.

What needs scrutiny is schools accepting public funding, obtaining patents on the results of this funding, then selling the patent to the highest bidder. We the taxpayer seem to end up ont the outside looking in.

Another variant is the professor leading the publicly funded research forming his/her own company to profit from the work. The key developments just “happen” to occur at the professors company, which applies for and receives patent protection. This increases the companies value, it is subsequently purchased by a big pharmaceutical company and the professor becomes quite wealthy. It’s also called conflict of interest.

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The US pharmaceutical market is an opaque, convoluted mess right now. The insurance companies pharmacy benefit managers (PBMs) control access to around 85% of the US market, if a drug isn’t listed on a PBMs formulary it has virtually no market. PBMs demand (extort?) rebates / kickbacks from pharmaceutical manufacturers as a condition for being listed on the formulary, the pharmaceutical manufacturer then raises the list price to cover the cost of the rebate / kickback, which also shifts costs onto the patient / uninsured. A first step in reforming the prescription drug market in the US would be to prohibit any payment from a provider to an insurer and require providers to publish list prices for their products and only sell at list prices, the lowest price gets on the formulary. This gives total transparency and will allow the market to work. Without the artificial inflation imposed by the insurance industry we can then see how US drug prices stack up against global prices. If prices remain inordinately high we need to understand why. For instance is the US tort system inflating costs through litigation expense & costly settlements? An alternative would be to open the US market to foreign suppliers, which would tend to drive global price parity.