Democratic presidential hopeful Kamala Harris vowed to investigate “price gouging” by pharmaceutical companies as president if Congress refused to pass laws lowering drug prices.
If Congress isn’t aligned with her goals, then her administration would act within 100 days in office, she said in a blog post presenting her plans to lower drug prices. It would use existing authority to “march-in” against drug companies found to be “most egregious” in charging high prices by licensing their patents to lower-cost competitors. Such a provision is permitted for drugs whose research and development was funded by the government.
Harris, a senator from California, is expected to speak about the plan in more detail on Tuesday at an AARP forum in Davenport, Iowa. Prescription drug prices rank toward the top of consumer concerns about healthcare, with a February Kaiser Family Foundation poll finding that 79% of voters find their costs unreasonable.
Harris’ plan details how she would act if Congress does not. If elected president, her administration would investigate new drugs, any prescription drugs that are sold in other countries for less than half of what they are sold for in the U.S., and any drugs whose prices increase in a single year by more than the “cost of inflation.” Her administration would publicly release findings on whether it has determined that a company’s price is unfair.
Any pharmaceutical companies found to be charging too much for drugs will get a warning letter demanding a lower price within 30 days. If companies don’t comply, then her administration would set off a Department of Justice investigation and would let people import drugs from other countries.
The rest of her plan would need the help of Congress to operate. It would would tax profits “made from abusive drug prices” at a rate of 100%. Profits from the taxes would go back to health insurance companies, which would need to pass on the money to consumers through mail-in rebates or through rebates at the pharmacy.
The plan also would let the government set drug prices, an arrangement that is currently illegal. The Department of Health and Human Services would set the “fair price” for medicines by tying the price to what other countries get. The price would be allowed to be no higher than double the average price of what the drugs are in Canada, the United Kingdom, France, Germany, Japan, or Australia. The agency would update the price annually, with a cap for inflation.
The plan also would close a tax provision that lets drug companies deduct the costs of advertising to consumers. The funds instead will go to the National Institutes of Health, the agency that funds medical research.
Harris accused President Trump of favoring drug companies through the tax bill that he signed into law in 2017. Trump has said that addressing drug prices is one of his priorities, but a couple of the initiatives that were being considered haven’t been able to move forward. A federal judge blocked a rule that would have obligated drug companies to put their list prices in TV ads, and the White House nixed a plan by Health and Human Services to make insurers who negotiate drug prices pass savings onto patients. Another part of the plan, which would price medicines administered to Medicare patients in doctor’s offices more similarly to prices in other countries, is still pending.
