Sanders, Cummings File Bill on Rising Rx Prices

Taxpayers Would Save $1 Billion in 10 Years

WASHINGTON, May 18, – Sen. Bernie Sanders (I-Vt.) and Rep. Elijah E. Cummings (D-Md.) today introduced legislation to curb skyrocketing prices of generic drugs.

Sharp price hikes not only impact consumers, hospitals, and pharmacists, but strain the budgets for Medicaid, Medicare, the Department of Defense and the Department of Veterans Affairs.

Under current law, brand-name drug manufacturers must pay a rebate to Medicaid when prices shoot up at a rate steeper than inflation. The proposed legislation – the Medicaid Generic Drug Price Fairness Act – would extend that provision to generic drugs. The non-partisan Congressional Budget Office estimated the policy change would save taxpayers $1 billion over 10 years.

“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs. For years, generic drugs have made it possible for people to buy the medicine they need at lower prices. We need to make certain that generics remain affordable,” Sanders said.

“Doctors, hospitals, pharmacies, and patients across the country have been raising the alarm about certain companies that are increasing the prices of their generic drugs without any explanation,” said Cummings. “Our bill will extend the same price protections that already apply to brand name drugs to generic drugs purchased under Medicaid—and it will save $1 billion in taxpayer funds in the process.”

Sen. Sherrod Brown (D-Ohio), a cosponsor of the Senate bill, said, “Generic prescription drugs provide a low-cost alternative to expensive name-brand drugs. We can save money for taxpayers and keep drug prices in check by ensuring that generic drug makers pay a rebate to Medicaid if their prices increase faster than the inflation rate.”

The legislation follows up on a recommendation by the Health and Human Services Office of Inspector General. According a 2007 study by the in-house auditor, taxpayers would have saved $966 million from 1991 to 2004 if generic drugmakers had been required to rebate Medicaid for the 200 drugs with the steepest price hikes.

The Senate and House bills are supported by Families USA, the Alliance for Retired Americans, the National Area Health Education Center Organization, Public Citizen, Social Security Works, the American Public Health Association and the National Association of Community Health Centers.

To read the Senate bill, click here.