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How Kamala Harris would address rising drug prices

By David Siders
The California senator is expected to promote the plan at an AARP forum in Davenport, Iowa.

Kamala Harris on Tuesday announced a plan to reduce prescription drug costs and rein in pharmaceutical companies, including linking the price of drugs to their prices in other countries.

The California senator is expected to promote the plan at an AARP forum in Davenport, Iowa.

What would the plan do?


If elected president, Harris said she would have the Department of Health and Human Services set a “fair price” for any prescription drug whose price increases annually by more than the cost of inflation — or which is sold for less money in any comparable country in the 36-member Organisation for Economic Co-operation and Development.

Any profits pharmaceutical companies make from selling a drug above that set price in the United States would be taxed at a rate of 100 percent, with proceeds going directly to consumers as rebates.

Harris said she would also work to close a tax loophole for pharmaceutical companies’ direct-to-consumer advertising expenses.

Harris said that if Congress does not act on her proposal within 100 days of taking office, she would take executive action to investigate price gauging and would appoint an attorney general who will prioritize investigations of abusive drug pricing.

She said the Department of Health and Human Services could also import drugs from Canada or other countries directly if they are available more cheaply there.

In egregious cases and if other efforts to control prices fail, Harris said she would use the government’s “march-in” rights to license a drug company’s patent to a lower-cost competitor.

What have other Democrats proposed?

Harris’ proposal is in line with what many Democrats in Congress and in the presidential primary campaign have floated.

Former Vice President Joe Biden and Sens. Bernie Sanders, Elizabeth Warren, Amy Klobuchar, Kirsten Gillibrand and Cory Booker, among others, support international reference pricing. In addition, Warren has proposed creating a government-run pharmaceutical manufacturer to produce generic drugs in cases where the free market is determined to have failed.

Why now?

Harris’ campaign said Americans, on average, spend $1,200 annually on prescription drugs, and the cost of drugs has become a major issue for voters regardless of party affiliation.

President Donald Trump has put pressure on drug-makers to curb the rise in prescription drug prices — notably proposing to tie some Medicare drug payments to lower international prices and to let states import medicine. But the administration has pulled back on some other drug-pricing initiatives.

“As President, I will not stand idly by as Americans pay thousands of dollars for prescription drugs while big pharmaceutical companies rake in massive profits. This plan puts people over profit by forcing these companies to reduce prices for consumers and holding them accountable when they gouge Americans,” Harris said in a prepared statement. “As Attorney General, I secured more than $200 million from pharmaceutical companies for California consumers, and as President, this will be a top priority in my first 100 days. We need someone who can fight to deliver results for the concerns that keep Americans up at night, like the skyrocketing cost of prescriptions.”