WASHINGTON, Dec. 17 – Skyrocketing generic drug prices cost taxpayers an additional $1.4 billion over the last decade according to a new report from the Department of Health and Human Services’ inspector general, undertaken at the request of Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.), ranking member of the House Committee on Oversight and Government Reform.
Prices of top-selling generic drugs rose faster than inflation 22 percent of the time over the 10-year study. If a rebate had been applied on generic drugs rising faster than inflation Medicaid would have saved more than $700 million in 2013 and 2014 alone.
“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs. The United States is the only major country on earth that does not in one form or another regulate prescription drug prices and the results have been an unmitigated disaster. This report further demonstrates that we need a new approach to stop skyrocketing drug prices in this country,” said Sanders.
“The IG report confirms that skyrocketing drug prices are not just an isolated problem caused by one or two CEOs motivated by greed, but a systemic injustice that enriches corporate executives at the expense of Americans in desperate need of their medications. Unfortunately, House Republicans have not sent a single letter to a single drug company requesting a single document to investigate these abuses,” said Cummings.
Sanders and Cummings’ Medicaid Generic Drug Price Fairness Act – included in the 2015 budget deal – requires generic drug manufacturers to pay back the Medicaid program if prices of their drugs rise faster than the rate of inflation. The passage of the generic drug inflationary rebate will save the federal government $1 billion over the next decade, according to the nonpartisan Congressional Budget Office.
Sanders and Cummings have urged Congress to build on the successful passage of their Medicaid rebate bill and implement prescription drug policies to counter sharp rises in drug prices. In September, they introduced legislation that would direct Medicare to negotiate drug prices, penalize drug companies that commit fraud and allow for the importation of lower-cost drugs from Canada.
The inspector general will conduct a follow-up study at Sanders and Cummings’ request that will analyze the impact of generic drug price increases on the Medicare Part D program.
To read the report click here.