Hillary Clinton unveils plan to lower prescription drug costs

Hillary Clinton on Tuesday unveiled a plan to rein in prescription drug costs by forcing pharmaceutical companies to reinvest their profits into research and allowing for more generic and imported drugs.

The proposal, which she outlined in a speech in Iowa on Tuesday, would also allow Medicare to negotiate lower drug costs and cap out-of-pocket expenses for individuals with chronic health problems.

The plan seeks to address a key shortcoming of Obamacare, President Obama’s signature health law, as the Democratic front-runner aims to show how she would put her imprint on it.

"We're going to add on to the good work that was done by the Affordable Care Act,'' Clinton told supporters at Moulton Elementary School in Des Moines, in arguing that her plan would both help consumers and encourage drug innovation.

She made clear that big pharmaceutical companies would face greater scrutiny if she wins the presidency. On Monday, Clinton sent out a tweet referencing a New York Times article about a drug to treat a life-threatening parasitic infection that increased in price overnight from $13.50 to $750 per tablet. She referenced the story again in her speech.

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"That is not the way the market is supposed to work. That is bad actors making a fortune off of people’s misfortune,'' said Clinton. "Pharmaceutical companies can charge astronomical fees, far beyond anything it would take to recoup their investment and far beyond’’ what they charge consumers outside America, she said.

The nation’s largest companies are also charging thousands of dollars for new drugs while receiving billions of taxpayer dollars for basic research, she said. "You should be focused on results that benefit us, not just your shareholders and your executives,’’ she said in making the case that companies should reinvest federal dollars.

The prescription drug plan is part of a broader focus on health care this week.

On Wednesday, she’ll outline a separate set of proposals to address other out-of-pocket health costs that patients face.

Clinton, who is making executive pay a focus of her campaign as well, also highlighted the higher profit margins the largest pharmaceutical companies enjoy relative to other industries.

Vermont Sen. Bernie Sanders, who's also seeking the Democratic presidential nomination, is sponsoring legislation to allow Medicare to negotiate lower drug prices with pharmaceutical companies. His legislation would also allow individuals and resellers to import prescription drugs from Canada, which offers lower-cost drugs. Ninety percent of seniors and around half of all Americans take a prescription drug. A typical senior enrolled in Medicare spends more than $500 per year out of pocket to buy prescription drugs.

According to an August survey by the Kaiser Family Foundation, more than 70% of Americans feel that drug costs are unreasonable and that drug companies put profits before people.

Eighty-three percent said they favor allowing the federal government to negotiate with drug companies to get a lower price.

The poll also found that the public continues to be skeptical of the Affordable Care Act, with 44% having a favorable view and 41% an unfavorable one.

Clinton's plan will also propose to:

• Deny tax breaks for consumer advertising and demand that drug companies instead invest U.S. taxpayer dollars in research and development. Many companies benefit from corporate write-offs for advertising aimed specifically at consumers. Companies that receive federal funds would be required to reinvest a certain amount in research.
• Encourage the production of generic drugs including lowering the amount of time companies can exclusively produce new treatments.
• Cap what insurers can charge consumers with chronic or serious health conditions in out-of-pocket costs. Health insurance plans would place a monthly limit of $250 on out-of-pocket costs for such patients.
• Allow Americans to import drugs from abroad. Countries in Europe with similar safety standards often pay half of what American pay for the same drugs, according to the campaign.
• Allow Medicare to negotiate drug and biologic prices, especially for high-cost drugs with limited competition.

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