LANSING — The House Health Policy Committee took testimony Wednesday on Republican-sponsored House Bill 5223, which would require drug manufacturers to supply annual reports to the state outlining their prescription drug pricing strategies and their drugs’ profit margins, and providing for a $100,000 fine if they fail to do so. While it would create a small measure of transparency in the pharmaceutical industry, it would offer far less consumer protection than a plan introduced earlier this year by House Democrats. The House Democratic plan would establish a Prescription Drug Consumer Protection Board, to review any potential price increases and hold companies accountable by requiring them to explain any increases or pay a fine if those increases exceed certain limits. The House Health Policy Committee chair has yet to schedule a hearing on the Democratic plan.

“HB 5223 provides transparency, which is good, but it fails to provide accountability — which is essential,” said state Rep. Winnie Brinks (D-Grand Rapids), the Democratic vice chairwoman of the House Health Policy Committee. “It’s not enough for families to know how much the price of a drug has increased from year to year – their pocketbooks can already tell them that. What they need to know is that wealthy pharmaceutical companies aren’t taking advantage of them by pricing lifesaving drugs out of reach, and that companies will be taken to account if they do. That’s what our Prescription Drug Consumer Protection Board would do.”

Specifically, the House Democrat plan (HB 5690-5691) would:

  • Create a Prescription Drug Consumer Protection Board, consisting of 13 people, consumer health advocacy groups, a pharmacy benefit manager, health insurers and state department heads.
  • Require drug manufacturers to justify to the board any price increase above 12 percent over a period of 24 months.
  • Have the power to impose penalties of up to $100,000 per day for a company that refuses to provide information.
  • Request the state attorney general investigate any manufacturer that has charged excessive and unconscionable prices; and
  • Strengthen consumer protection tools that will allow the attorney general to aggressively pursue these bad actors to ensure that Michigan consumers are refunded for the excessive amounts they paid for their medicine.

“Without accountability in place, big pharmaceutical companies can raise the price of lifesaving drugs as high as they like without consequence. It allows them to hold families hostage and make them choose between their money or their lives,” said state Rep. LaTanya Garrett (D-Detroit), a member of the House Health Policy Committee and sponsor of HB 5691. “Our plan puts a stop to that and makes them answer to the people of Michigan. That’s the kind of real consumer protection that House Democrats have made a priority.”

“Requiring companies to be open about their pricing is a good start, but we can’t stop there,” said Rep. Darrin Camilleri (D-Brownstown Township), sponsor of HB 5690. “When families are protected from price gouging, they’re free to pursue other opportunities and put that money toward their kids’ education, building their own business or preparing for retirement. Those dollars are better spent in Michigan communities, rather than lining the pockets of wealthy pharmaceutical CEOs.”