If corporations can be granted the same freedom of speech as “people,” perhaps they can be shamed like the rest of us into keeping prices from skyrocketing? That’s the thinking behind a plan by health advocates in California who are looking to prevent drug companies from making big price hikes by flooding them with bad PR before the new rates go into effect.
Proposed legislation from the California Democrats would require drug companies to warn of increases at least 60 days for price hikes of 10% or $10,000 per year. For generics that figure is 25% or $100.
Such measures would help prevent more Martin Shkrelis from hiking prices many orders of magnitude and gouging customers, the Mercury News reports. For their part, the drug companies have been very critical of the proposed legislation, saying it could cause drug shortages, presumably by putting the supply and demand model at risk.
Bill author Ed Hernandez, a Democratic Senator from Azusa, told the News that companies should make a profit, but gouging the public and taxpayers wasn’t acceptable. Of course, if Shkreli’s situation taught the public anything, it was that shame often does nothing in the smirking face of a lust for profit.
Rising drug costs have been in the news for more than just Turing Pharmaceuticals’ hike of an old HIV drug from $13.50 to $750; it’s been a major issue in the 2016 presidential campaign and the subject of numerous bills across the country about drug costs.
As the News notes, California has already joined Vermont and a few other states in introducing laws requiring cost transparency. This fall, voters will decide whether pharma companies will be allowed to charge more than the relatively good deals the Veterans Administration hospitals negotiate.