Should generic drug price increases within Medicaid be limited to inflation? (S1364)

Summary for Congressional bill S 1364 (114th):

  • Forces generic drugmakers to pay rebates to Medicaid when prices rise faster than inflation.
  • Lowers the price that consumers would pay for generic drugs.

In Depth:

  • Estimated to save state Medicaid programs $750M over 10 years.
  • CBO estimates this would save the federal government $1B over 10 years.
  • This is in response to generic drug prices being raised in 2014, some 1,000% or more, many without cause.

Vote Yes if you believe:

  • Generic drugs should be kept affordable. #GenericDrugs
  • Drug costs are increasing too quickly, causing a strain on the American people. #Drugs #CorporateGreed
  • The merging of drug companies has created less competition. #Drugs #FreeMarket
  • Drug companies should not be allowed to gouge the American people. #Drugs #RegulatoryBurden

Vote No if you believe:

  • The government should not regulate the generic drug market. #FreeMarket #RegulatoryBurden
  • Material cost for generic drugs could go up dramatically, causing a need for price increases. #SupplyAndDemand
  • Less of the drug could be needed, causing individual drug prices to increase. #SupplyAndDemand #EconomiesOfScale

Congress.gov link to S 1364

(This is the 1st draft of the summary for a bill in Polinav. Summary & In-Depth is non-partisan & Vote yes/no reasons are fact-checked. if you think something is wrong, should be added or deleted, comment below!)


When I read about this bill for the first time, I thought that they were finally making it so the government could negotiate bulk pricing with drug companies like other developed nations. Alas, as I looked more into it, it was a much narrower in scope, targeting the dramatic rises in prices of generic drugs, some without cause.

This is a perfect example of why I think we need a single payer healthcare system in the US. The reason the prices of these generic drugs have risen is because they can and within a free market economy, of course we should let them! They’ve bought out (or merged with) the competition, so it’s either their drug or nothing else, so they can charge whatever they want for it! They’ve earned the right, according to the free market…but, the big question then becomes whether we want that with our healthcare or not?

Someone needs a drug in order to drastically improve the quality of their life. The brand-name drug is out of their budget. Generic drugs used to be within their budget, but now that they’ve drastically raised prices to just below brand-name prices, it’s not affordable. Do we want these free market principles to come into play when it’s our health on the line?

The International Federation of Health Plans did a survey in 2013 that found that the US pays 2-6 times more than other countries for brand-name drugs.

So really, even before we get to single payer, let’s just let our government negotiate prices with drug companies. If we just did that, the US would no longer subsidize the cost of drugs for the entire world. Every other developed nation does it, except us…hence why our drug costs are dramatically higher than other developed countries. The sad thing is, the US still pays less as a % of the total healthcare spend on drugs than other countries…shows that we have a lot of work to do on the whole health care system. This bill is a step in the right direction, but we need more!

I would want my representatives to vote YES on this bill!

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