Clinton wants the proposed drug-price control board to include federal public health and competition officials. (Photo: Clinton's office)

(Bloomberg) — Democratic presidential candidate Hillary Clinton, acting on her pledge to curb what she has called outrageous drug costs, outlined a set of proposals to crack down on “unjustified” increases on prices for older treatments.

The plan released Friday on the candidate’s website adds to a year of attacks against pharmaceutical firms that have hiked the prices of life-saving treatments, including the outcry over Mylan NV’s EpiPen emergency allergy shot. Her measures would give the U.S. government a broader role in determining the correct price for some drugs, a task that’s typically been off limits for federal regulators.

Related: Clinton’s attacks on drug prices leave health stocks reeling

Mylan is the latest in a string of pharmaceutical companies drawing scrutiny over steep price increases, with drug executive Martin Shkreli and representatives from Valeant Pharmaceuticals International Inc. called before Congress this year. Responding to outrage on the price increases for the EpiPen, Mylan announced that it would introduce a generic version for $300, while also continuing to sell the branded product.

“It’s wrong when drug companies put profits ahead of patients, with unjustified price increases not for new innovations, but for long-available and generic treatments,” Clinton’s campaign said in a statement on her website. “We need rules of the road so fair competition keeps them in check.”

Mylan fell 2.2 percent to $40.99 at 11:19 a.m. in New York, while Valeant rose less than 1 percent to $29.12.

Response team

The Clinton plan calls for creation of a drug-pricing consumer response team that would include federal public health and competition officials, according to the statement. The group will monitor sharp price increases, potentially recommend penalties for unjustified hikes and help make cheaper drugs available.

The plan “is populist, a nod to the Sanders left,” Terry Haines, an analyst at Evercore ISI, said in a note to clients. “This is exactly the kind of campaign headline risk that we have been telling investors to expect from the fall campaign.”

Clinton’s proposals specifically target price increases on older drugs, such as EpiPen and Daraprim — the decades-old pill from Turing Pharmaceuticals AG that increased 50-fold under Shkreli — not the eye-catching price tags on new treatments. While the plan doesn’t get into specifics, it would let the federal government determine how much drugs should cost, based in part on production cost and the value of the treatments to patients.

Pushing back

Once regulators determine that an old drug’s price has gone up too much, Clinton’s plan offers ways of pushing back. The government could directly purchase the medicine, or allow importation from other countries where alternatives are sold at lower prices.

The U.S. Food and Drug Administration already can import drugs from other countries to address shortages in the U.S. For example, the agency did so in 2013 when quality issues caused a short supply of injectable nutrition drugs.

Clinton proposed fining drugmakers that push prices too high, or forcing them to pay higher rebates. The rebate proposal would build on an existing rule in Medicaid that can require manufacturers to lower costs for Medicaid, the government health program for the poor, when drug prices rise faster than the rate of inflation.

Comments ripple

The candidate’s earlier comments on prices have rippled throughout the drug industry. Mylan’s shares began falling on Aug. 24 within minutes of Clinton calling price increases on EpiPen, a shot used to halt allergic reactions that can be life-threatening, the “latest troubling example of a company taking advantage of its consumers.” The comments also preceded broader losses in the Nasdaq Biotechnology Index, which fell 3.4 percent the same day.

Clinton’s influence was also felt last year when she weighed in on Shkreli’s increases on Daraprim’s price. The NBI fell 5 percent for more than two hours on Sept. 21, 2015, after she tweeted, “Price gouging like this in the specialty drug market is outrageous. Tomorrow I’ll lay out a plan to take it on.”

Related:

The real reason that drugs cost more in the U.S.

Hillary Clinton unveils new health plan

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