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Clinton proposing $250 monthly cap on prescription drug costs for patients

During a Democratic presidential candidate Hillary Clinton says she will lay out a plan this week to cap out-of-pocket prescription drug costs. (Video: Reuters)

Democratic presidential candidate Hillary Rodham Clinton is proposing a $250 monthly cap on the amount patients with chronic and serious medical problems would have to pay out of pocket for prescription drugs as a way to reduce the effect of skyrocketing drug prices on consumers.

The cap is part of Clinton’s program to alter and expand the Affordable Care Act, the signature domestic policy achievement of President Obama, if she is elected to succeed him. Clinton will discuss the prescription drug plan Tuesday in Des Moines, Iowa. Some details were provided by her campaign in advance.

Clinton herself telegraphed the plan with a Twitter message Monday vowing to go after “price-gouging” by drug companies. She cited the nearly 5,000-percent increase in the per-pill cost of a drug to treat parasitic infections.

That price hike was profit-driven, Clinton said Monday at a political rally in Little Rock, Ark. The Democratic front-runner said she would crack down on such price increases because “nobody in America should have to choose between buying the medicine they need and paying rent.”

Clinton is calling her health-care ideas a way of refining the Affordable Care Act, the sprawling 2010 law that is reshaping parts of the U.S. health-care system. But her ideas would navigate the law into a realm of drug prices that its authors largely sidestepped.

Clinton is taking some political risk by a full-throated endorsement of a law that remains divisive, though polling shows sharp partisan differences in support for it. Clinton casts the issue as an example of retrograde Republican ideas that would undo progress she claims under Obama.

“All the Republican candidates for president are determined to get rid of the Affordable Care Act.  Actually, Republicans in Congress have tried to repeal it 54 times,” Clinton said Monday in Little Rock.

“I'm not going to let them rip away the progress we've made.  I'm not going to let them tear up that law, kick 16 million people off their health coverage, and force this country to start the health-care debate all over again.  That’s not going to happen on my watch.”

Parts of Clinton’s proposal reprise ideas for controlling the cost of prescription drugs that Democrats have advocated for years and that have been the subject of heated debates on Capitol Hill. And her ideas fit, in part, within a long tradition of focusing on drug prices in Medicare, the federal insurance program for older and disabled Americans. Among those who favor a stronger government hand in drug prices, Medicare has been regarded as a logical leverage point. It has a huge enrollment – now, about 50 million – and older people rely the most on medicine.

Many congressional Democrats also have long contended that Medicare should be given power to negotiate directly the price of drugs that are sold to the older and disabled Americans insured through the program. This idea, too, was part of the political struggle over the law that created Medicare drug benefits. In the end, that law specifically banned the government from negotiating with pharmaceutical companies. When he first ran for the White House in 2008, President Obama said that he wanted to rescind that ban. But to avoid antagonizing the pharmaceutical industry, the idea of allowing Medicare to negotiate drug prices was never seriously debated as part of Affordable Care Act.

Clinton’s campaign said her prescription drug plan would be modeled on state plans, such as those in California and Maine, that limit patient out-of-pocket costs. The campaign said Clinton would also seek to end a tax credit for direct-to-consumer drug advertising and allow Americans to import drugs from abroad.

The idea of reimporting drugs as a cost-saving strategy goes back nearly two decades. A dozen years ago, it surfaced as a major dispute as Congress was designing the legislation that added Part D drug coverage to Medicare. At that time, Democrats pushed through the Senate a proposal that would have allowed pharmacists and drug distributors to reimport medicine manufactured in the United States from Canada, where pharmaceuticals usually are sold at lower prices. The idea was resisted by many Republicans, including the George W. Bush administration, and it never became law.

The 2003 proposal sought to defuse criticism about potential safety problems with drugs that have bounced back and forth between countries’ borders, limiting imports to drugs sold in Canada and giving the Health and Human Services department the authority to decide, drug by drug, whether reimporting them would be safe and would save money. In her proposal, Clinton also addresses the question of safety, but with fewer specifics. Her proposal would let Americans “safely and securely import drugs for personal use from foreign nations whose safety standards are a strong as those” in the United States. And it says that the Food and Drug administration and other regulatory agencies would “set careful standards.”

Drug prices in America have risen for many reasons, including that few incentives exist for pharmaceutical companies to voluntarily keep prices down, and there are few mechanisms for government officials to stabilize prices. By law, the Food and Drug Administration cannot consider the cost of a new drug when deciding whether to approve it for the U.S. market. Medicare also cannot negotiate prices with drug companies.

Those limitations mean that companies themselves are left to determine the prices for their drugs, and they often settle on whatever amount they believe the market will bear. Drug makers often argue that their prices reflect the need to recoup huge investments they pour into developing drugs, most of which fail. But at the same time, critics argue that the high prices of new drugs often bear little resemblance to their actual value. While some breakthroughs have offered huge benefits or even cures for a condition, others have produced only margin benefits for patients, if any at all.

Pharmacy benefit manager Express Scripts released a study earlier this year that found more than a half million Americans have yearly prescription drug costs of $50,000. In addition, more than 100,000 Americans spent more than $100,000 on prescription medicines in 2014 – that number tripled over the previous year, the company said. The same study found that U.S. prescription drug spending increased more than 13 percent in 2014 alone, the largest relative increase in more than a decade, and that the change was driven largely by spending on specialty medications.

Among those that have grabbed headlines: A controversial drug to treat hepatitis C that costs $1,000 a pill, or $84,000 per course of treatment; a wave of innovative cancer drugs in recent years that cost more than $100,000 a year; breakthrough drugs for cystic fibrosis that cost $250,000 a year or more; a new class of cholesterol-lowering drugs that are priced at about $14,000 a year and eventually could replace cheap statin medications for certain patients.

Brady Dennis contributed to this report.