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State-Based, Market-Oriented, Prescription Drug Negotiations Act of 2016


Pinnacle

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IN THE SENATE OF THE UNITED STATES
 

Mr. Pinnacle, with thanks to Mr. Meadows, introduced the following bill; which was referred to the Committee on the Judiciary


A BILL

To allow State-based, market-oriented, prescription drug negotiations to lower pharmaceutical drug prices, to encourage competition, to increase consumer choice and access, and for other purposes.

 

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, 

 

SECTION 1. SHORT TITLE.

This Act may be cited as the “State-Based, Market-Oriented, Prescription Drug Negotiations Act of 2016”.

SEC. 2. ANTITRUST EXEMPTION FOR PRIVATE HEALTH INSURER ISSUERS TO NEGOTIATE WHOLESALE ACQUISITION PRICES OF PRESCRIPTION DRUGS PURCHASED FROM DRUG MANUFACTURERS.

It shall not be a violation of the antitrust laws for one or more private health insurer issuers or their designated agents to jointly negotiate wholesale acquisition prices of a prescription drug with a manufacturer of a prescription drug with regards to the reimbursement policies of the insurers of the manufacturer’s drugs so long as no one single wholesale acquisition price is jointly determined between the insurance issuers or their designated agents.

SEC. 3. DEFINITIONS.

For purposes of this Act:

(1) ANTITRUST LAWS.—The term “antitrust laws” has the meaning given it in subsection (a) of the 1st section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent such section 5 applies to unfair methods of competition.

 

(2) HEALTH INSURANCE ISSUER.—The term “health insurance issuer” means an insurance company, insurance service, or insurance organization (including a health maintenance organization, as defined in paragraph (3)) which is licensed to engage in the business of insurance in a State and which is subject to State law which regulates insurance (within the meaning of section 514(b)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(2))). Such term does not include a group health plan.

 

(3) HEALTH MAINTENANCE ORGANIZATION.—The term “health maintenance organization” means—

  (A) a federally qualified health maintenance organization (as defined in section 300e(a) of title 42 of the Code of Federal Regulations),

  (B) an organization recognized under State law as a health maintenance organization, or

  (C) a similar organization regulated under State law for solvency in the same manner and to the same extent as such a health maintenance organization.

 

(4) MANUFACTURER.—The term “manufacturer” means anyone who is engaged in manufacturing, preparing, propagating, compounding, processing, packaging, repackaging, or labeling of a prescription drug.

 

(5) PRESCRIPTION DRUG.—The term “prescription drug” means any human drug required by Federal law or regulation to be dispensed only by a prescription, including finished dosage forms and active ingredients subject to section 503(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)).

SEC. 4. EFFECTIVE DATE.

This Act shall take effect on the date of the enactment of this Act but shall not apply with respect to conduct that occurs before such date.

 

Congress & Supreme Court Admin


Admin NPCs:
Rep. Derek H. Gray (D-TX-20)

Speaker of the House & Democratic Party Chair

 

The Hon. John Roberts

Chief Justice of the Supreme Court

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Mr. President,

I rise today in opposition to this bill. This one sentence bill will not do anything to help the serious problem of skyrocketing prices in our country. All it will do is continue to pad the pockets of big Pharma. 

This bill allows drug manufacturers to negotiate prices. The fact of the matter is they have been setting their prices for all of history. That’s what has lead to the 288% price difference between the US and other developed countries. They’ve realized people will pay anything to stay alive. They are profiting off of keeping people alive and gouging those prices so they can make maximum profit.

We need real legislation like LAHBA that every republican voted against that will foster competition and lower prices. 

All developed countries have one thing in common. Price control. They control the prices of their prescription drugs so people don’t die because they have to ration drugs. 

That, Mr. President is why I stand against this bill and encourage any other person in this chamber, who doesn’t want people to die, to vote against it. 

I yield

William C. Motter D-CO-02 (Boulder, Fort Collins, Broomfield)

 

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Mr. President,

I stand in favor of this Bill and in support of the American public.

This one-sentence, effective piece of legislation lowers prescription drug prices without a federal takeover of private markets and the consumer option.

First, building off of Switzerland’s framework, this Bill creates a protection from antitrust liability for private  insurers so that they can jointly negotiate with drug manufacturers. Such competitive negotiations between insurers and manufacturers are necessary to involve more players in the prescription drug market, and in turn lower drug prices for Americans.

Next, it provides that there can’t be a single, wholesale price set for prescription drugs. This ensures that consumers can exercise choice in buying cheaper medicine that they so desperately need.

I yield.

Congress & Supreme Court Admin


Admin NPCs:
Rep. Derek H. Gray (D-TX-20)

Speaker of the House & Democratic Party Chair

 

The Hon. John Roberts

Chief Justice of the Supreme Court

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Mr. President,

 

I rise to join my colleagues in opposition to this bill.

 

We need to take a serious look at drug prices. Far too many Americans are forced to make tough decisions about their expenses. Many are left to decide whether to go to the grocery store, keep the lights on, stay warm, or buy the life saving prescription drugs they need. Americans according to a study from Brookings spend $1,112 per capita on prescription drugs. That is more than any other country. 

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So in my mind there is no question we need to find solutions. However, I think we can all agree it is going to take more than legislation designed to score political points and actually not solve this issue for people. To resolve this complex issue we need to sit down and discuss a solution that is more than a one sentence bill. The majority should pull this bill and we should get to work on an actual solution.

 

I yield the floor.

 

 

Senator Matthew Baccei

Republican | New Hampshire

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Mr. President, 

While the gentleman from Arkansas may want the commendation from this side of the house for going after drug prices, he's going to be disappointed. This bill doesn't actually do that. He and the Republican majority are operating on the false pretense that these pharmaceutical companies are more focused on consumers than they are shareholders and CEO's. That would, by all standards be a poorly run business. These companies charge what they charge because they have the American people by the throat: pay or die. What this bill does is tie one large corporate market to another one. Is there anyone in this house that says insurance companies and pharma companies care more about consumers that profit? If they do, I'd love to see their hands, because I'm going in on some ocean front property in Iowa and I'm also looking for investors. 

He speaks of choice. These are sometimes life saving medicines: insulin, chemo, Epi-pens. This bill does not require costs to fall it just allows for insurance companies to cooperate and not compete. The gentleman from Arkansas cannot guarantee that prices fall. He hopes they do. He wishes they will. But he also knows that they could do nothing. 

We can do better than this bill. The American people deserve it. 

 

I yield

Calvin Ward

Senator Massachusetts- D 

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Mr. President,

I'm not sure how the folks across the aisle can take to the floor of the Senate and say this bill won't do anything to reduce prescription drug prices. That's ridiculous. Standing here and railing against the free market, demonizing a specific sector of the economy, doesn't do anyone any good. Here's what does do some good: Letting the market work to lower prices, and that's exactly what this bill does. Much is being made of the prescription drug industry's profit motive, but little is being said about health insurers wanting to make a profit. That's exactly what's going to make this bill work as intended. Health insurers will want to negotiate the lowest prescription drug prices they can in order to reduce their expenditures on prescription drugs. It's just common sense market economics.

I support this bill because I believe in market-based solutions to the challenges we face, rather than diving head first into socialism.

I yield.

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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Oh here we go mr. President,

Whenever we Democrat’s want to help Americans by say, lowering their drug prices, we get called socialists. 

We’ve seen that this one sentence bill will not work. We’ve seen it throughout the entire history of this country. What we have also seen in every other developed country in the world is that we need forcible price control like what they have in Sweden and Canada and Japan and Germany and Denmark and every other developed nation. We need a bill that will work. This is not it.

I yield

William C. Motter D-CO-02 (Boulder, Fort Collins, Broomfield)

 

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Mr. President,

Id like to quote the great President Harry Truman,

Socialism is a scare word they have hurled at every advance the people have made in the last 20 years.

Socialism is what they called public power.

Socialism is what they called social security.

Socialism is what they called farm price supports.

Socialism is what they called bank deposit insurance.

Socialism is what they called the growth of free and independent labor organizations.

Socialism is their name for almost anything that helps all the people.

When the Republican candidate inscribes the slogan “Down With Socialism” on the banner of his “great crusade,” that is really not what he means at all.

What he really means is, “Down with Progress”

 

I yield

William C. Motter D-CO-02 (Boulder, Fort Collins, Broomfield)

 

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Mr. President,

As the Gentleman from Colorado took to the floor to quote Harry Truman and call for price controls, I asked my aides to check the calendar for me real quick. Judging by the Gentleman's comments, I thought maybe we had time traveled back to the late 1940s. Or maybe more accurately the late 1970s, when price controls under the Nixon, Ford, and Carter administrations were choking the life out of the American economy. My aides assure me we are still here in the year of our Lord 2016 though, and I found that pretty comforting.

We've had these debates, Mr. President. We've had them here and we've had them abroad, and as the 20th century came to a close, the free market triumphed over the forces of socialism. The result was a rising tide of prosperity that lifted every boat. We here on this side of the aisle aren't interested in reliving the same failed policies of the past and quoting ghosts on the floor of the Senate. We're here to propose new solutions for a new millennium, and real solutions to the challenges we face today lie primarily in the free market. This bill takes us there. Nostalgia doesn't.

I yield.

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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Mr. President

to the gentleman from Iowa, I’ll say to him if these free market principles worked so well, why do we pay more than our Canadian neighbors? Why do we pay more than our European allies? If they will work, why haven’t they? He can’t answer that question. It’s a hope and prayer. He’s exactly right though. Pharmaceutical and insurance companies want to negotiate the price because it keeps the profits up. He talks about new solutions, but it’s the same old Conservatives proposing the same old things. In 2015 Pfizer paid its CEO $18 million dollars. Now I know the party opposite believes he’s having to scratch and save every single penny of that to get by and he’s concerned about consumers, but in this century, in a realistic world, rational people don’t believe that for one second. I will not be voting for cloture on this motion and will return here every day if I have to. 

I yield 

Calvin Ward

Senator Massachusetts- D 

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Mr. President,

As it turns out, I can answer the question posed by the Gentleman from Massachusetts.

Our health care system is so costly precisely because the federal government has interfered so much in the health care market. We've blundered from one big government health care policy to another for generations, and the result is higher premiums, higher deductibles, higher co-pays, people not being able to keep the plans they liked, not being able to see the doctors they want to see, and all the things we were promised wouldn't happen under ObamaCare. That's why our health care system is in the state it's in, because of incompetent federal interference in the health care market.

This bill is a perfect example of how to start fixing our broken health care system. You free up the market and let it work to reduce costs. If we let health insurers negotiate drug prices, they're going to negotiate hard for lower prices, which will benefit everyone.

It's just basic economics.

I yield.

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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Mr. President,

he speaks of basic economics, let’s give him a lesson. Are these companies designed to increase or decrease their profits? 

I’ll yield for his simple answer 

Calvin Ward

Senator Massachusetts- D 

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Mr. President,

They're designed to increase their profits. And the best way for health insurers to increase their profits in relation to prescription drug prices is to negotiate lower prescription drug prices. Then they're paying out less money for prescription drugs, which means more profit. It also means a better deal for consumers as prescription drug prices fall thanks to health insurers negotiating lower prices.

Class dismissed.

I yield.

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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Mr. President,

if they’re going to want to increase their profits regardless, doesn’t it make sense that they’re not going to lower them? The gentleman is being plain silly. I will not vote in favor of cloture on this motion. It’s settled. We need a better bill that’s actually addresses the issue, not give pharma and insurance companies free reign. 

I yield

Calvin Ward

Senator Massachusetts- D 

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Mr. President,

The Gentleman from Massachusetts seems to lack a firm understanding of what's happening in this bill. The bill would allow health insurers to negotiate prescription drug prices with drug companies. Health insurers and drug companies are both driven by profit, but in this case the profit of health insurers requires negotiating reduced prescription drug prices. Health insurers are in the stronger negotiating position because they are paying the lion's share of the cost of prescription drugs, and thus they're in a position to demand reduced prices from drug companies. Are they motivated by their profit? Yes. Their own profit. Not the drug companies' profit. And this competing profit motive is exactly what's going to drive prescription drug prices down.

Honestly, Mr. President, it defies belief that some of the folks across the aisle have such a poor understanding of basic economics.

I yield.

Senator Holly Hawthorne (R-AK)

@HollyHawthorne | Join the Freedom Caucus!

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Mr. President,

Do you like to eat?

I’m from Arkansas—I love to eat. Food is essential to human life, and places like McDonald’s and Burger King profit off of this simple fact.

If you, Mr. President, were a stakeholder or executive of McDonald’s, and the federal government just declared that ALL hamburgers are now $0.25: how likely are you to make your burgers any better than Burger King’s burgers? What incentivizes you to make your burgers better for consumers? Nothin’.

Switzerland (which has one of the best healthcare systems in the world) realizes that the government takeover of private products—like hamburgers and prescription drugs—reduces the quality of those products for consumers. That’s why, like this Bill proposes, Switzerland protects drug manufacturers and insurers from anti-trust liability when negotiating drug prices. The state doesn’t control the prices and the state doesn’t issue healthcare...because private enterprise is better at it.

So I urge my colleagues to decide: vote for competition and trust consumers to pick the highest quality or most affordable burger; or vote to give every American the same cheap chunk of meat.

I yield.

Congress & Supreme Court Admin


Admin NPCs:
Rep. Derek H. Gray (D-TX-20)

Speaker of the House & Democratic Party Chair

 

The Hon. John Roberts

Chief Justice of the Supreme Court

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