Senate Bill Would Limit Prices Drug Companies Could Charge

The perception is that it is normally Democrats who support price controls; that is why Sen. Slade Gorton (R-WA), who is up for reelection this year, made such a big splash on April 21 when he introduced a bill that would prevent US drug manufacturers from selling drugs in the United States at a higher price than in countries such as Canada, where drug prices are set by the federal government. The Gorton bill would allow drug wholesalers to sue manufacturers under the Robinson-Patman Act, which prohibits price discrimination. One example Gorton is using for out-of-whack US drug prices is tamoxifen(Drug information on tamoxifen) (Nolvadex): $15 for a month’s supply in Canada, $95 in the US. Several Republicans from states near Canada rushed to cosponsor the Gorton bill. Former GOP Sen. Dan Coats, now a Washington lobbyist representing the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry trade association, told a PhRMA meeting that in the absence of any other proposal, such as a coverage bill along the lines of Breaux/Frist 2000, the Gorton bill could pass by “a very significant” margin if it came to the Senate floor right now. Interestingly, Sen. Ted Kennedy (D-MA), who is sponsoring a bill that would limit prices drug companies could charge Medicare recipients (to the “best” price offered to federal agencies and HMOs), opposes the Gorton bill, according to press secretary Jim Manley. “He wants a more free market–based approach,” says Manley. “He is concerned about the impact the Gorton bill would have on ground-breaking research.” Jeff Trewhitt, a PhRMA spokesman, says the Gorton bill is “a price-control bill that will not work,” but he admits that the fact Gorton introduced the bill “is cause for concern.”