Watertown, NY – U.S. Senator Kirsten Gillibrand today visited the Samaritan Medical Center to announce the Stop Price Gouging Act, which would drive down prescription drug prices, ensure access to affordable medications for New York seniors, and penalize drug companies that raise prices of medication without justification. Under current law, pharmaceutical companies can raise the price of their medication at any time with no justification. There is no mechanism to prevent a manufacturer from spiking the price of its drugs year after year, and pharmaceutical corporations are not required to report the increases in the price of their drugs to the public. In January 2017, median prices for prescription medications increased by an average of nearly nine percent, about four times higher than the overall inflation rate, forcing many seniors living on a fixed income to consider going without their medication.
“No matter where I am in our state, one thing I keep hearing over and over again is that New York’s seniors are extremely worried about the high cost of prescription drugs,” said Senator Gillibrand. “We must solve this crisis, and one of the most effective ways we can do that is by finally holding drug companies accountable with tough penalties when they spike the price of prescription drugs that New Yorkers need to treat their illnesses. I am proud to be the author of the Stop Price Gouging Act, and I will fight as hard as I can in the Senate to pass this important bill.”
“The continual rise in the cost of many medications has caused many in the healthcare industry to scrutinize budgets and make difficult decisions – such as postponing the purchase of new technologies or facility improvements,” said Thomas Carman, President and CEO of Samaritan Medical Center. “Another, more concerning issue we’re seeing with the rising cost of medications is patients neglecting to take their medicines because of its high cost. This often leads to unnecessary Emergency Department visits or readmission into the hospital, both of which could be avoided if the medications were more affordable.”
“Over the past 5 years, the 20 most common prescription medications for seniors have risen 10 times the rate of inflation. Few consumer products even come close to that number,” said Timothy Ruetten, Director of Jefferson County Office for the Aging. “In the North Country, Jefferson County Office for the Aging staff work with clients who often find themselves being forced to choose between food, heat or medication. Choices like that can make it impossible for seniors to safely remain in their homes and can result in very preventable, expensive and traumatizing hospitalizations. Combined with rapidly increasing out of pocket costs for private insurance coverage, the rising costs of prescription medications pose an insurmountable obstacle to basic health needs of many North Country Seniors.”
Gillibrand’s legislation would penalize pharmaceutical companies that engage in price gouging without cause, leading to price spikes for patients who rely on medication to treat diseases ranging from cancer to opioid addiction. The bill is co-sponsored by U.S. Senators Sherrod Brown (D-OH), Jack Reed (D-RI), Maggie Hassan (D-NH), Tom Udall (D-NM), and Richard Durbin (D-IL).
Gillibrand’s legislation, the Stop Price Gouging Act, would do the following:
- Require pharmaceutical corporations to report any increases in the price of their products, as well as justification for any increases that exceed medical inflation, to the Health and Human Services (HHS) Inspector General, as well as to the public;
- Impose a tax penalty on corporations that engage in excessive, unjustified price increases that are proportional to the size of the price spike;
- Instruct the Government Accountability Office (GAO) to conduct a study examining how drug manufacturers establish initial launch prices and suggest best practices for monitoring new drug pricing; and
- Reinvest penalties collected from companies in future drug research and development at the National Institutes of Health (NIH).
Gillibrand is also pushing for Congress to act now to pass four other bills she has cosponsored that would help increase access and affordability of medications for seniors. Gillibrand is an original cosponsor of the Capping Prescription Cost Act, which would ensure that individuals and families with high prescription drug costs are protected and can access necessary medications. This legislation would cap monthly co-pays in private insurance plans for prescription drugs at $250 per person and $500 per family. The Improving Access to Affordable Prescription Drugs Act would tackle the issue of rising drug costs in the U.S. in four key areas: transparency, access and affordability, innovation, and choice and competition. The Medicare Drug Price Negotiation Act of 2017 would allow the Secretary of Health and Human Services to negotiate drug prices in Medicare. The Affordable Safe Prescription Drug Importation Act would instruct the Secretary of Health and Human Services to issue regulations for allowing wholesalers, licensed U.S. pharmacies, and individuals to import qualifying prescription drugs manufactured at FDA-inspected facilities from licensed Canadian sellers and licensed sellers in other countries.