Between January 2015 to January 2018, the drugs that multiple sclerosis patients rely on have skyrocketed from $60,000 to close to $100,000. In the last decade, the top three insulin manufacturers — Eli Lilly, Novo Nordisk, and Sanofi — have increased the price of insulin by 700 percent in lockstep as 1 in 4 diabetics rations or forgoes this lifesaving medication due to cost. And within this year alone, over 3,400 drugs have already seen price spikes of an average 10.5 percent, representing five times the rate of inflation.
The American people are crying out. Prescription drug prices are literally killing them.
{mosads}Why are prices so high? Though I believe the pharmaceutical industry raises prices because they can, we have no way to comprehensively or adequately answer that question, because current law allows drug companies to make prescription drugs more and more expensive without offering any transparency into their business practices. American taxpayers are footing the bill while struggling to afford their necessary medications; Medicare spends 23 percent of its budget on prescription drugs, adding to our $22 trillion national debt.
Drug companies typically alert their shareholders about price increases before they are implemented. If so, what is so challenging about giving the same notice to the American taxpayers who often fund their research and development? If price increases are being made for a legitimate reason, drug companies should have no issue openly and publicly detailing their rationale.
My bipartisan More Efficient Tools to Realize Information for Consumers (METRIC) Act (H.R. 2296) will finally offer the American people the drug price transparency that they deserve. This package is essential, and it is long overdue. Though transparency is only one piece of the puzzle in bringing down the cost of prescription drugs, I am proud that my colleagues on the House Energy and Commerce Committee from both sides of the aisle joined me last week to unanimously advance the most robust, most comprehensive, and most effective drug price transparency legislation that has ever been seriously considered in the United States Congress.
Section 2 of the METRIC Act incorporates the Fair Accountability and Innovative Research (FAIR) Drug Pricing Act of 2019, which I introduced with Rep. Francis Rooney (R-Fla.) earlier this Congress. The provisions of the FAIR Drug Pricing Act will bring basic transparency to the market for prescription drugs by giving taxpayers public notice of price increases for the very first time.
Pharmaceutical manufacturers would be required to notify the Department of Health and Human Services (HHS) and submit a justification report 30 days before they increase the price of certain drugs by more than 10 percent, or by more than 25 percent over three years. The justification report will require manufacturers to accurately and truthfully provide an explanation for the price increase; the manufacturing, research and development costs for the drug; net profits attributable to the drug; marketing and advertising spending on the drug; expenditures on patents and licensing for the drug; executive compensation during the period of the price increase; and other information that the secretary decides is necessary through rulemaking.
I have introduced the FAIR Drug Pricing Act each Congress since the 114th. While other transparency legislation has been considered for the first time this Congress, I feel confident that H.R. 2296 will provide greater information for consumers about the true costs of drug development and marketing. Unlike other proposals, my bill requires HHS to make all of the nonproprietary information from price justification reports publicly available online for anyone to access. And unlike other proposals, my bill does not allow pharmaceutical manufacturers to pick and choose what information they would like to disclose. We cannot honestly tell the American people that we are addressing the issue of drug price transparency if we simply tell manufacturers to put out a flattering press release after increasing the price of their drugs.
Additionally, the METRIC Act will increase transparency around the rebates and merger activity of pharmacy benefit managers, or PBMs. As chair of the Energy and Commerce Consumer Protection and Commerce Subcommittee, I am especially happy the METRIC Act mandates a report from the Federal Trade Commission to study merger activity of PBMs and potentially anticompetitive practices that could increase drug prices. Though I do believe Big Pharma is the worst actor in the drug price gouging of the American people, we need to ensure we’re considering the actions of all players in the drug supply chain.
I hope that my colleagues will join me to push for this bill to be swiftly considered on the House floor and that the American people will encourage their representatives to vote for this bill. I believe that we have a responsibility to protect and serve the best interests of the American people — not the interests of extraordinarily wealthy pharmaceutical corporation executives and Wall Street investors. We must act on the issue of skyrocketing prescription drugs, and we are being given the opportunity to do so right now by passing the METRIC Act.
Schakowsky is chairwoman of the House Energy and Commerce Consumer Protection and Commerce Subcommittee.