The Senate Special Committee on Aging just released a report on drug pricing, which contains scathing criticism of the “hedge fund model of drug pricing”.
“The skyrocketing prices of prescription drugs affect every American family, particularly our seniors,” said Chairman Collins. “This report is the culmination of the Senate Aging Committee’s year-long, bipartisan investigation into the egregious price increases on a number of decades-old drugs acquired by pharmaceutical companies that act more like hedge funds. We must work to stop the bad actors who are driving up the prices of drugs that they did nothing to develop at the expense of patients just because, as one executive essentially said, “because I can.”
“The hedge fund model of drug pricing is predatory, and immoral for the patients and taxpayers who ultimately foot the bill—especially for generic drugs that can be made for pennies per dose,” Ranking Member McCaskill said. “We’ve got to find ways to increase competition for medicines and ensure that patients and their families aren’t being gouged.”
In fact, our esteemed Senators and Representatives have actually passed legislation that enables and encourages this behavior. The Secretary of Health and Human Services, who writes the checks for $646 billion dollars of annual Medicare spending, is prohibited by statute from negotiating drug prices with pharmaceutical manufacturers. This means that whatever the drug company wants to charge, Uncle Sam and our seniors have to pay.
Chairman Collins of Maine and Ranking Member McCaskill of Missouri, instead of a meaningless press conference full of whining, how about you introduce bipartisan legislation to allow the Department of Health and Human Services to negotiate drug prices. They are the single largest purchaser of healthcare products and services in the country. If HHS were able to negotiate, then there would be no incentive for so-called bad actors (which are really just savvy business people) to play this game.