UPDATE 2-Clinton proposes $250 monthly cap on prescription drug costs

Tue Sep 22, 2015 10:19am EDT
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(Adds background on drug price increases)

By Amanda Becker

LITTLE ROCK, Ark., Sept 22 (Reuters) - Democratic presidential candidate Hillary Clinton on Tuesday will propose a $250 monthly cap on prescription drugs to stop what she calls "excessive profiteering" by pharmaceutical companies.

At a campaign stop in Iowa, Clinton will outline 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 patients with chronic or serious medical conditions.

"It is time to deal with skyrocketing out-of-pocket costs," Clinton said on Monday during a campaign stop in Little Rock, Arkansas,

Her 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.

Shares of biotech companies such as Biogen Inc and Gilead Sciences Inc dropped on Monday after Clinton tweeted that steep prices for specialty drugs were "outrageous."

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.   Continued...