CCAGW Urges Opposition to S. 977, the Transparent Drug Pricing Act | Council For Citizens Against Government Waste

CCAGW Urges Opposition to S. 977, the Transparent Drug Pricing Act

April 3, 2019

U.S. Senate
Washington, D.C. 20510

Dear Senator,

S. 977, the “Transparent Drug Pricing Act,” was introduced by Sen. Rick Scott (R-Fla.) on April 1, 2019.  On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you not to co-sponsor or vote for this legislation.

While CCAGW respects Sen. Scott’s involvement and knowledge on healthcare issues, including his sharp criticism of Obamacare and strong opposition to government-run healthcare, proposing price controls for pharmaceuticals is not the proper approach to reduce the cost of drugs. 

S. 977 would prevent pharmaceutical companies from charging a retail price for a drug that is higher than the lowest cost for the same drug found in five other countries: Canada, France, Germany, Japan and the United Kingdom (U.K.).  This is the Trump administration’s ill-advised proposed International Pricing Index on steroids, as that plan, which is also the wrong approach to this issue, would utilize a composite of international prices from 14 countries, not the lowest in five countries.

This legislation ignores that fact that these countries utilize price controls, the threat of compulsory licensing (stealing intellectual property), and rationing to keep drug costs down.   They do so by taking a free ride on the massive biopharmaceutical research and development that produces new drugs in the U.S.  The Association of the British Pharmaceutical Industry reported that in 2016, the U.S. led the world’s pharmaceutical R&D expenditures at 58 percent, while Japan had 13 percent, the U.K. had 7 percent, Germany had 6 percent, France had 5 percent, and Canada had 1 percent. 

S. 977 would also force insurance companies to inform their enrollees 60 days in advance of open enrollment of the total costs of their prescription drugs for a full 12 months.  That would force insurers to raise drug costs as a security measure, including the need to cover increased costs due to a shortage of a particular drug, which could happen for any number of reasons.

It would be better for President Trump and Congress to negotiate better trade deals with countries that respect American intellectual property and stop foreign nations from free-riding on our innovations.

I again urge you not to support this legislation.  Any votes taken on S. 977 will be among those considered for CCAGW’s 2019 Congressional Ratings.

Sincerely,

Tom Schatz
President, CCAGW

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