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US anti drug price gouging bill goes to committee

04-Oct-2012

A US Bill designed to stop price gouging during drug shortages has progressed to the Committee stage.

The “Protecting Patients and Hospitals From Price Gouging Act” – introduced late last month by Senator Charles Schumer (D-NY) – aims to stop pharmas, suppliers and “any party within the chain of distribution of any vital drug from taking unfair advantage of consumers during market shortages.”

Any party found to be in breach of the proposed law during a shortage – which would be for a period of six months after a shortage is declared - may be  subject to imprisonment for 3 years, fined up to $5m or both.

Under the Bill the US Attorney General would have to consider if the price of a drug reasonably reflected additional costs not within control of the company, any additional risks taken to produce the medicine and the overall difference in price.

Any benefits that prices hold for the wholesalers or distributors in comparison with marginal earnings in the year before a market shortage was declared will also be factored in.

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