Washington, DC – U.S. Senator Kirsten Gillibrand today announced the Stop Price Gouging Act to hold drug companies accountable for large price increases. This 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 overdose reversal. The bill is co-sponsored by U.S. Senators Sherrod Brown (D-OH), Al Franken (D-MN), Jack Reed (D-RI), Maggie Hassan (D-NH), Tom Udall (D-NM), and Richard Durbin (D-IL).
In 2015, Americans spent an all-time high of $324 billion on prescription drugs, with taxpayer dollars accounting for nearly 70 percent of this spending. According to Consumer Reports, nearly 28 million Americans have personally experienced a spike in the cost of their prescription medications over the past year. In New York, in 2016 alone, 280 million prescription drugs were filled at retail pharmacies. Under current law, pharmaceutical corporations can increase the price of their products without justification. According to an analysis by Harvard researchers, the Stop Price Gouging Act would result in billions of dollars in savings for taxpayers.
“The Stop Price Gouging Act would for the first time impose stiff penalties on drug companies that gouge the prices of medicines that their patients rely on for lifesaving treatment,” said Senator Gillibrand. “We’ve seen too many cases where drug companies, like the makers of the EpiPen, have cruelly inflated their prices on prescription drugs – some even by as high as over 5,000 percent – just because they could get away with it, without any concern for how their actions would affect sick New Yorkers who are desperate for access to life-saving medicine. I am proud to introduce this bill with my Senate colleagues, and I will continue to do everything I can to make sure that New Yorkers never have to bankrupt themselves when they get sick and need to pay for medicine.”
“The purpose of prescription drugs is to allow Ohioans to live longer, healthier lives – not to line the pockets of Big Pharma executives,” said Senator Brown. “Too many Ohioans still struggle to afford the medicine they need, and often, the culprit is price gouging by big pharmaceutical corporations. It has to stop, and that’s why I’m introducing the Stop Price Gouging Act, to protect Ohioans from prescription drug price spikes and to require drug companies to report increases in drug prices, and justify their increases.”
“One of the biggest problems in the prescription drug industry is that there isn’t nearly enough accountability,” said Senator Franken. “Without explanation, millions of Americans see their drug bills become more and more unaffordable each year. Our bill would help keep price gouging in check by forcing drug companies to justify price spikes and penalizing them if they can’t. This step would help put the pharmaceutical industry on a road that puts the livelihoods of patients ahead of profits.”
“Year after year, we continue to see astronomical increases in drug prices, and rarely is there a good reason offered for these price jumps. We need to bring some measure of transparency to prescription drug pricing. This legislation will help hold drug companies accountable if they try to unfairly hike prices on medications that patients depend on,” said Senator Reed.
“It is long past time for Congress to take bold action to lower the cost of prescription drugs,” said Senator Hassan. “Time and again, we have seen big pharmaceutical corporations unjustly hike up the price of their products, padding their pockets at the expense of families and seniors. These harmful practices must end, and that is why I am proud to introduce the Stop Price Gouging Act to finally put patients first.”
“New Mexicans who rely on prescription drugs for life-saving treatment shouldn’t be at the mercy of corporate executives padding their bottom line,” said Senator Udall. “No one should face going broke in order to get well — we need to stop unfair price-gouging by Big Pharma and ensure people can access affordable medication when they need it. Our bill would require badly needed transparency in how pharmaceutical corporations set their prices and justify their cost spikes.”
The Stop Price Gouging Act would:
- 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 is proportional to the size of the price spike;
- Instruct the Government Accountability Office to conduct a study examining how drug manufacturers establish initial launch prices and suggest best practices for monitoring new drug pricing; and
- Reinvest revenues collected from companies in future drug research and development at the National Institutes of Health (NIH).
The Stop Price Gouging Act has been endorsed by the Center for Medicare Advocacy, Daily Kos, Families USA, People Demanding Action, Public Citizen, Social Security Works, Doctors for America, Universities Allied for Essential Medicines, People of Faith for Access to Medicines, and Interfaith Center on Corporate Responsibility.