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Sanders' Plan Calls for Direct Government Talks on Drug Prices

By Melanie Zanona, CQ Roll Call

September 1, 2015 -- Democratic presidential candidate Bernard Sanders moved on Tuesday to elevate rising prescription drug costs as a campaign issue, introducing a plan that would allow the government to negotiate directly with pharmaceutical companies on behalf of Medicare.

The Vermont Independent is backing legislation that would allow the Health and Human Services Department (HHS) to directly cut deals for the federal health insurance program for the elderly and disabled, a policy supported by 83 percent of respondents to a recent Kaiser Family Foundation poll. Currently, private insurers negotiate drug purchases for Medicare's Part D prescription drug benefit.

"We should use our buying power to get better deals for the American people," Sanders said in a press release. "Other countries do it. Why don't we?"

The measure would also allow drugs to be imported from licensed Canadian pharmacies, whose prices are lower because the government controls them. A Sanders press release said he was the first U.S. lawmaker to take Americans across the border to Canada in order to purchase a cheaper prescription breast cancer medication.

Sanders' bill also would require drugmakers to report to HHS on how they set their prices and how much they spend on research and development. The measure would terminate patent exclusivity periods for companies that commit fraud and prohibit "pay for delay" deals, which allow brand-name drugmakers to pay other manufacturers to keep cheaper generic versions of their products off the market.

About one in four Americans have difficulty paying for their prescription medications, Sanders has said. U.S. drug prices rose 12.6 percent last year, according to the Centers for Medicare and Medicaid Services.

But the pharmaceutical industry has maintained that spending on prescription drugs is funneled into R&D used to develop new cures. Drugmakers also argue that prices fall over time as brand-name drugs lose their patent protections and face competition from generics.

"Ensuring patients have access to the health care they need is critical, but short-sighted policies that would hinder access and slow the development of innovative medicines to help patients live longer, healthier lives is not the answer," a spokeswoman for the Pharmaceutical Research and Manufacturers of America said. "Too often, discussions about costs focus on the 10 percent of health care spending that goes toward innovative, life-saving medicines rather than looking at the big picture and ways that medicines can help avoid other unnecessary care–while ignoring how the marketplace for medicines works to hold down costs."

Sanders has advocated for a single-payer health care system and long championed lower drug prices as a critical piece of overhauling the health care system. He introduced another measure (S 1364) this year that would require generic drug manufacturers to pay a rebate to Medicaid when prices rise faster than inflation, which the non-partisan Congressional Budget Office estimates would save $1 billion over 10 years. Similar language was included in the bill Sanders introduced Tuesday.

Soaring drug prices could emerge as a prominent issue as Sanders presses forward with his campaign. Hillary Rodham Clinton has already vowed to fight rising prescription drug costs. An August Kaiser poll suggests that 72 percent of Americans feel that drug costs are unreasonable and 74 percent believe drug companies put profits before people.

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