House, Senate Dems Take on Excessive Prescription Drug Costs

New board would protect consumers, require Rx price transparency
Monday, August 21, 2017

FLINT — State House and Senate Democrats announced today their plan to stop prescription drug price spikes in Michigan. Almost 60 percent of American adults take prescription drugs, and according to the American Medical Association, drug prices increased 10 percent on average in 2016 — well outpacing inflation and wage growth — while some skyrocketed as much as 5,500 percent. This is the third straight year of double-digit increases in drug prices. Under the House and Senate plan, a Prescription Drug Consumer Protection Board would be established, composed primarily of consumer advocates, to protect Michigan consumers from unjustified price increases.

“Prescription drug prices are out of control in Michigan, and we’ve heard that over and over, from every corner of the state,” said House Democratic Leader Sam Singh (D-East Lansing). “So far, nothing has been done to address this or to help the people in our state who still have to choose between paying their bills or buying the medicine they need to survive. House and Senate Democrats are focusing on a proactive solution to the price gouging problem we’re facing. We’re fighting to give consumers a voice, and the Prescription Drug Consumer Protection Board will do that.”

Under the legislation, drug manufacturers would be required to submit documentation justifying price increases above 10 percent in one year, or 30 percent over five years, to the Prescription Drug Consumer Protection Board for review. Drug manufacturers that refuse to submit the required information to the Board would be subject to penalties and fines for failure to comply. Under the plan, the Michigan Consumer Protection Act would also be strengthened to require the Attorney General to investigate any drug manufacturers that the Board believes have subjected Michigan consumers to grossly excessive price spikes.

“Seeing people spend hundreds and even thousands of dollars on life-saving medication, like $500 Epi-Pens, is unacceptable,” said state Rep. Vanessa Guerra (D-Saginaw). “We need to be doing all we can to fix this broken part of our health care system and help our constituents afford the medications they need. This is a common-sense measure, and it should be a bipartisan effort.”

 With similar legislation having already been introduced and enacted in a number of states, the Democratic plan aims to hold drug manufacturers accountable when it comes to pricing prescriptions. Through the strengthening of the Consumer Protection Act, in conjunction with the new board, pharmaceutical companies would be required to show how prescription costs are determined and where their money is spent.

“When you have certain medication prices spiking so high, so quickly, there’s a problem,” said state Sen. Steve Bieda (D-Warren). “The Democratic plan will make drug manufacturers think twice before raising their prices in Michigan and causing families hardship. We’re sending a clear message that we’re on the side of the consumer.”

Under the House and Senate Democratic plan, the Prescription Drug Consumer Protection Board would:

  • Consist of 13 members, composed primarily of consumer advocacy groups. Drug purchasers and state department heads would also serve on the Board.
  • Require drug manufacturers to justify to the board any price increase above 10 percent in one year or 30 percent over five years.
  • Impose penalties of $100,000 per day for a company that fails or refuses to justify price spikes.
  • Require the state attorney general’s authority to investigate any drug manufacturer that is accused of price gouging Michigan consumers and determine if there is probable cause to take legal action, including seeking significant financial penalties

This legislation is the latest effort by House and Senate Democrats to safeguard health care in Michigan, following the introduction of the “Michigan Health Care Bill of Rights” in May.

“We aren’t waiting for someone else to take the lead on protecting the people of our state — we’re on the front lines, doing it ourselves,” said state Rep. Tim Sneller (D-Burton). “The Prescription Drug Consumer Protection Board legislation is another piece in addressing the health care puzzle. House and Senate Democrats are committed to seeing this legislation, and our Health Care Bill of Rights, passed swiftly, to make sure that everyone in the state has access to affordable, quality health care and medication.”