* Consumer marketing would no longer be tax-deductible under
plan
* Clinton says she would encourage generic drug development
* Nasdaq Biotechnology index down 1.7 percent
(Adds Turing to roll back price increase, Clinton tweet,
paragraphs 7-8)
By Amanda Becker
DES MOINES, Iowa, Sept 22 (Reuters) - U.S. Democratic
presidential candidate Hillary Clinton proposed on Tuesday a
$250 monthly cap on out-of-pocket prescription drug costs and
other measures to stop what she called "price gouging" by
pharmaceutical companies.
At a campaign stop in Iowa, Clinton rolled out a plan to
encourage the development and use of generic drugs and to end
pharmaceutical companies' ability to write off consumer-directed
advertising as a business expense.
Under Clinton's plan, the monthly cap would limit what
insurance companies could ask patients to pay for drugs that
treat chronic or serious medical conditions.
"We need to protect hard-working Americans here at home from
excessive costs. Too often these drugs cost a fortune," she said
in Des Moines, adding drug companies keep the profits for
themselves while "shifting the cost to families."
Clinton's comments came after the New York Times reported on
how a startup biotechnology company, Turing Pharmaceuticals,
raised the price of the 62-year-old Daraprim treatment for a
dangerous parasitic infection to $750 a tablet from $13.50 after
acquiring it.
"That is bad actors making a fortune off people's
misfortune," she said.
In the face of sharp criticism of its action by patients,
medical groups and Clinton, Turing's chief executive officer,
Martin Shkreli, told ABC's "World News Tonight" on Tuesday that
the price of Daraprim would be lowered "to a point that is more
affordable." ID:nL1N11S2WA
"Good," tweeted Clinton in response to news of the planned
price rollback.
The Nasdaq Biotechnology index .NBI closed down 1.7
percent on Tuesday after falling as much as 3.5 percent during
the session. It had already fallen 4.4 percent on Monday after
Clinton tweeted her intent to tackle high prices of some drugs.
The index, which had finished the last six years higher, is
up 10.4 percent so far this year.
Citi biotechnology analyst Liav Abraham said that with 2016
presidential candidates taking on steep drug pricing, "companies
with less differentiated, more concentrated product portfolios
are likely to come under increased political scrutiny."
But the rhetoric may have "more bark than bite," he said,
since the reforms would require approval by a
Republican-dominated Congress that is unlikely to implement
them.
While Clinton has maintained her front-runner status in the
Democratic race, she has been under pressure to take more
populist stances to widen her lead over U.S. Senator Bernie
Sanders, her second-place rival who has also offered a plan to
rein in prescription drug costs.
CONSUMER MARKETING CONTROVERSY
Critics of marketing drugs to consumers say it encourages
the use of costly brand names over generics and can be confusing
or misleading. A series of court decisions has determined the
practice cannot be banned outright because it is a form of
commercial speech protected by the U.S. Constitution.
Clinton said the government could get billions of dollars in
additional tax revenue by no longer allowing pharmaceutical
companies to deduct what they spend marketing drugs to
consumers.
The largest pharmaceutical companies are collectively
earning $80 billion to $90 billion per year at higher margins
than other industries while average Americans struggle to pay
for medicine, Clinton's campaign said.
Clinton also proposed a ban on "pay-for-delay agreements,"
in which the owner of a brand-name drug pays a generic
competitor to keep its product off the market for a period of
time, usually as part of a litigation settlement.
Clinton said she wanted Medicare, the U.S. government's
health insurance program for the elderly, to be able to
negotiate with pharmaceutical companies over drug prices and
require more generous rebates.
Consumers would also be allowed to purchase drugs from other
countries, where medicine is often less expensive, so long as
sufficient safety standards are in place, Clinton said.
She said her proposals would augment President Barack
Obama's healthcare law known as Obamacare. High drug costs had
played a role in making families feel like healthcare costs were
not coming under control, she said.
Clinton was expected to outline a separate set of proposals
on Wednesday to address other out-of-pocket healthcare costs.
Traditional "Big Pharma" companies have long faced criticism
for steadily raising prices of their prescription medicines in
the United States, often by jumps of 10 percent or more.
Drugmakers are unapologetic about their five- or six-digit
prices on new treatments for cancer, hepatitis C and high
cholesterol. Sovaldi, a treatment from Gilead Sciences Inc
GILD.O , can cure hepatitis C but at a cost of $1,000 per pill.
Even more controversial have been eye-popping increases in
costs for older drugs in limited supply, often after other
drugmakers acquire them. They say the funds help cover research
and development costs for new products.
For more on the 2016 presidential race, see the Reuters
blog, "Tales from the Trail" (http://blogs.reuters.com/talesfromthetrail/).
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BREAKINGVIEWS-Breakdown: Rare drugs and their even rarer
finance ID:nL1N11L1ZS
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