Durbin Unveils New Bill To Prevent Large Drug Price Hikes

FLAT Prices Act would target abusive pharmaceutical companies by shortening monopoly periods, bringing lower-cost generics to market sooner

SPRINGFIELD – As the costs of prescription drugs continue to rise for American patients, providers, and taxpayers, U.S. Senator Dick Durbin (D-IL) today joined local hospital leaders to unveil new legislation to help prevent sudden, outrageous price hikes for prescription pharmaceuticals.  The Forcing Limits on Abusive and Tumultuous (FLAT) Drug Prices Act of 2019, which Durbin will formally introduce in the Senate next week, will reduce the government-granted monopoly period for medications if their prices are significantly increased, enabling lower-cost generic drugs to come to market earlier.

“Health care is still too expensive for too many working families, and the soaring cost of prescription drugs is one of the major reasons why,” Durbin said.  “That’s why I am introducing a new bill next week in Washington, which will prevent large price spikes for prescription drugs.  Whether it’s the overnight price hikes by greedy Wall Street executives, or the year-over-year increases for decades-old medications like insulin, these price-gouging practices must end.  It’s long past time Congress puts patients before Pharma, and I hope 2019 will be the beginning of real change.”

“The skyrocketing price of prescription drugs is preventing patients from accessing the medicine they need and threatening the ability of hospitals to provide the highest quality care to their patients," said A.J. Wilhelmi, President and CEO of the Illinois Health and Hospital Association (IHA).  "IHA and the Illinois hospital community applaud Sen. Durbin’s ongoing leadership on this issue and we look forward to partnering on this effort to advance solutions to address the high cost of prescription drugs, including sudden and exorbitant price increases.”

Currently, pharmaceutical companies are awarded “monopoly periods” of five to 12 years by the U.S. Food and Drug Administration (FDA) for new drug approvals.  During this time, FDA agrees not to review cheaper, generic alternatives.  Too often, pharmaceutical companies use this monopoly period—where no generic competition is allowed—to bilk taxpayers and patients with excessive price increases.  

The FLAT Prices Act would reduce this FDA-granted exclusivity period for a drug whose price increases more than 10 percent in a year, or similar amounts over a multi-year period.  Drug manufacturers would be required to self-report their price spikes to the Department of Health and Human Services (HHS), and they would have the opportunity to provide an appeal to justify such a price increase.  Failure to report such a price hike would incur additional reductions in market exclusivity. 

Pfizer’s drug for nerve pain, Lyrica, has increased more than 30 percent since President Trump took office, now costing $550 per month.  Lyrica’s patent rights have expired but the monopoly is protected by FDA market exclusivity until November 2021. Because Lyrica has been protected from lower-cost competitor drugs, Pfizer has been able to increase the price with impunity.  Under the FLAT Prices Act, Pfizer’s recent unjustified price spikes would trigger a reduction in its monopoly period, resulting in new competition from lower-cost generic drugs sooner. 

According to the AARP, retail prices for more than 250 of the most widely used brand-name prescription drugs increased by an average of 10 percent each year from 2011 to 2016.  In 2017, the average price increase was four times higher than general inflation.  Already in 2019, pharmaceutical companies raised prices for hundreds of medicines in the United States.

The FLAT Prices Act is endorsed by Patients for Affordable Drugs Now, Families USA, the American Academy of Neurology, and Knowledge Ecology International.

Today’s new drug pricing bill builds off Senator Durbin’s legislation to tackle the inflationary impact of direct-to-consumer (DTC) pharmaceutical advertising by requiring price disclosure in television ads.  Each year, the pharmaceutical industry spends $6 billion in DTC ads to steer patients to the most expensive, often unnecessary, brand-name medications.  Durbin’s bipartisan measure with Senator Chuck Grassley (R-IA) passed the Senate, and is now being implemented via regulation by HHS.  Requiring price transparency in drug commercials will help empower patients and lower prescription drug costs.