How Kamala Harris Plans to Take on the Pharmaceutical Industry

Last Friday, the parents of Jesimya (Jesy) Scherer-Radcliff laid him to rest. He was only 21 years old. It is said that there is no greater loss than the death of your child. But Jesy’s parents have an even greater burden to shoulder. Their son’s death was totally preventable; as a diabetic, he was rationing his insulin.

Nicole Smith-Holt, who also lost her 26 year-old son for the same reason, described their deaths by saying, “My son and Jesy, they were murdered. They were killed by big Pharma. The cause of death should actually be on their death certificates, corporate greed.” She has traveled with others to Canada in search of insulin, where it is ten times cheaper than in the U.S.

Annual insulin costs in this country doubled between 2012 and 2016. One study in the Journal of the American Medical Association, cited by the Guardian, found that around one in four patients with diabetes say they ration the medicine due to cost.

That is a stark example of what is happening with the price of insulin. But Americans are also paying the price for other prescription drugs. One third of Americans say they have skipped filling a prescription one or more times because of the cost. Eighteen percent say they have had trouble paying for basic necessities like food or housing due to the cost of their medication.

This week, presidential candidate Kamala Harris introduced her proposal to tackle this issue. Like other plans that have been put forward, she would enable the secretary of Health and Human Services to set new top prices for all drugs sold in America based on those used in other developed countries like Germany, Canada, and the UK.

What is unique about Harris’s plan is that she is increasingly developing proposals that include two tiers. The first tier includes legislation she would propose as president—like giving HHS the power to set limits on prescription drug prices. The second tier lays out how she would use existing executive authority if congress fails to act. She has done this with her proposals on gun control, equal pay, and immigration.

It is in this second tier of Harris’s plan for prescription drugs that her proposal stands out. Pharmaceutical companies found to be price-gouging will be given 30 days to offer a price reduction. If they fail to do so, alternatives will be approved for importation from other countries.

But the final step involves the use of existing authority under the Bayh-Dole Act to “march-in” and license a drug company’s patent to a lower-cost competitor. What Harris is proposing was described here at the Washington Monthly by Alicia Mundy, who wrote that the next president can lower drug prices with the stroke of a pen.

To understand the “march-in” authority of the Bayh-Dole Act, it is important to note that “government funding played a role in nearly half of the 478 drugs approved by the FDA between 1998 and 2005, according to one study, and almost two-thirds of the most important and cutting-edge ones.” As Mundy wrote:

Bayh-Dole also mandated, however, that the federal government retain its own rights to the patents, which it could exercise under certain conditions. If, for instance, a company failed to use a federally funded discovery to get a product to the market, the federal agency could “march in” and offer the rights to another company to commercialize and sell the drug to the public. Or it could offer “royalty-free rights” on any patent to companies that would manufacture products strictly for government use—say, a drug sold only to the military.

The proposal from Harris explains that, “The Bayh-Dole Act provides the federal government this authority for drugs that resulted from publicly-funded R&D to ensure they are ‘available to the public on reasonable terms.'”

Mundy also suggested that the threat posed by the invocation of this “march-in” authority “may be the only way to force the drug companies and lawmakers in both parties to sit down with the administration and hammer out a broader array of reforms.”

What is most interesting about Harris’s two-tiered approach is that she is not only putting forward policy proposals, she is adopting a theory of change. If, as Mundy suggests, even the threat of “march-in” authority is enough to get the players to the table to negotiate, we’ve moved a step closer to breaking the gridlock imposed by Republicans. With voters growing more cynical daily about the ineffectual nature of our government, a workable theory of change is at least as important as the details of policy proposals.

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Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly. Follow her on Twitter @Smartypants60.