CNBC - Our Bipartisan Bill Will Force Drug Companies to Justify 'Drastic' Price Hikes

Op-Ed

By Rep. Jan Schakowsky and Rep. Francis Rooney

Drug companies are making record profits and at the same time raising the prices of life-saving prescription drugs more and more every day. What's worse, drug companies have no legal obligation to justify or explain the massive spikes in drug prices.

In today's polarized political environment, it's hard to find any issue that an Illinois Democrat and a Florida Republican can agree on. Here's one: the skyrocketing costs of prescription drugs are a scourge that must be dealt with as soon as possible.

While there is no one magic bullet to bringing down prescription drug costs, we believe that requiring transparency in drug pricing is an important step forward. Today, Rep. Francis Rooney has signed on to H.R. 2439, the FAIR Drug Pricing Act, a bill that takes the first step in addressing skyrocketing prescription drug prices by requiring basic transparency for pharmaceutical companies that drastically spike the price of a drug.

With Mr. Rooney's co-sponsorship, the bill is now bipartisan in both the House, where Rep. Jan Schakowsky is the lead sponsor, and in the Senate, where it enjoys the support of Sen. Tammy Baldwin of Wisconsin and Sen. John McCain of Arizona.

The FAIR Drug Pricing Act, whose initials stand for "Fair Accountability and Innovative Research," would require drug companies to give notice and justification for raising the price of a drug more than 10 percent at one time or more than 25 percent over three years.

For each price increase drug companies would have to tell the public what they spent on manufacturing, research and development costs for the qualifying drug, net profits attributable to the qualifying drug, and marketing and advertising spending on the qualifying drug.

We believe that consumers have a right to know whether drug companies are spiking the costs of their medications because they're spending more on research and development or simply because they can. At the moment, we have no way of knowing.

What we do know is that recently, major drug companies have drastically raised their prices, even for top selling drugs or drugs that have been on the market for decades. Prices have more than doubled for four of the top ten selling drugs over the past five years.

High profile examples like disgraced "Pharma Bro' Martin Shkreli raising the cost of a tablet of the generic Daraprim from $13.50 to $750 have Americans clamoring for justice and accountability.

All over our country, from Florida to Illinois and from Wisconsin to Arizona, families are having to make impossible decisions like choosing whether to pay the rent or pay for the prescription drugs that their loved ones need. Seniors, who on average use more prescription drugs, are struggling to afford the medicines they need.

According to AARP, the average annual cost for one brand name drug used to treat a chronic health condition topped $5,800 last year, compared to less than $1,800 a decade ago. This while the median income for Medicare beneficiaries is only $26,200 a year.

The national conversation regarding the high costs of prescription drugs is already happening at the checkout counters of pharmacies and at the kitchen tables of hard-working families all over the country. We want to make sure that this conversation is continued in the halls of Congress as well.

That's why we're urging all of our colleagues in Congress -- Republicans and Democrats, Representatives and Senators -- to join us by cosponsoring and passing the FAIR Drug Pricing Act.

We may not all agree on exactly how to bring prescription drug costs down, but we can at least come together to recognize this as the crisis it is and to demand that drug companies explain themselves to the American people.

The prescription drug price crisis will require bold action, innovative solutions, and yes -- bipartisan cooperation. We're proud to come together today to support the FAIR Drug Pricing Act, and will continue to do everything we can to bring prices down and hold pharmaceutical companies accountable.

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