Among the 2020 Democratic presidential candidates, there are more detailed, constructive, smart policy plans than Donald Trump could conceive of in his lifetime. Sen. Kamala Harris introduced a new one Tuesday. She envisions a muscular federal government making sure that pharmaceutical companies stop ripping off consumers and that patients don't have to choose between paying for food and housing or paying for the medicine they need.
Her plan would empower the Department of Health and Human Services to determine and "set a fair price for any prescription drug that (1) is sold for a cheaper price in any comparable OECD country, or (2) increases its annual price by more than the cost of inflation." That fair price could not be higher than 100% more than what people have to pay in countries such as Canada, the U.K., France, Germany, Japan, or Australia. HHS would evaluate prices for each identified drug on at least an annual basis and set a cap for inflation. That's powerful incentive for drug companies to set reasonable prices, but to reinforce that, Harris would tax all profits that drug companies made from selling a drug above that fair price at a rate of 100%, and then use those funds as direct rebates to consumers, managed by insurance companies. Harris would also close the tax loophole that allows pharmaceutical companies to deduct the cost of their direct-to-consumer advertising from their federal taxes. Her statement announcing the plan notes that "advertising expenses by pharmaceutical companies have increased rapidly over the past two decades, from $1.3 billion (79,000 ads) in 1997 to $6 billion (4.6 million ads) in 2016," and that "these actions should not be subsidized by taxpayers." Better yet would be reinstating the ban on direct-to-consumer prescription drug ads, but this is good, too. The recaptured revenue would be directed to NIH funding for research into new treatments.
This is another big-deal part of her plan: For the first time since it was enacted in 1980, Harris would use authority granted by the Bayh-Dole Act to "march in" and "license a drug company’s patent to a lower-cost competitor." Bayh-Dole gives the federal government to power to basically seize patents for drugs developed through publicly funded research and development to ensure that they are "available to the public on reasonable terms" by granting a license to other companies to produce and offer cheaper versions. The campaign provides the example of an HIV drug: "The pharmaceutical giant Gilead Sciences currently lists its HIV prevention drug Truvada at over $20,000 a year, despite taxpayers footing a significant portion of the R&D funding that went into the drug’s development." That would require no legislative action; it's already been done.
As for the remainder of the plan, if Congress doesn't act within 100 days of her inauguration, she'll take executive action and "investigate prescription drugs that (1) are sold for a cheaper price in any comparable OECD country (2) increase their annual price by more than the cost of inflation, or (3) are new with no comparison price or drugs, and publicly release findings on whether a drug’s price is unfair" and "directly intervene to increase access and lower the cost" of drugs produced by companies that have been found to be price-gouging.
"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," she said in a statement introducing the plan. "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."