Faith Ninivaggi / Reuters

Hillary Clinton proposes $250 monthly cap on prescription drugs

Democratic presidential candidate to announce plan for development of generic drugs, curbs on consumer-directed ads

Democratic presidential candidate Hillary Clinton on Tuesday will propose a $250 monthly cap on prescription drugs for patients with chronic or serious medical conditions in a drive against what she calls "excessive profiteering" by pharmaceutical companies.

At a campaign stop in Iowa, Clinton is set to outline a plan to encourage the development and use of generic drugs and also would end drug 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.

On Monday, Clinton vowed during a campaign stop in Little Rock, Arkansas that, "It is time to deal with sky-rocketing out-of-pocket costs."

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 says the government could save billions of dollars by no longer allowing pharmaceutical companies to deduct what they spend marketing drugs to consumers and those funds could be redirected into encouraging research and development.

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.

Once a political liability for Democrats, President Barack Obama’s health care law has been credited with helping reduce the number of uninsured people from 48.6 million in 2010 to 29 million people in the first three months of 2015. Clinton's campaign, however, said a typical senior on Medicare spends more than $500 annually on out-of-pocket costs to buy prescription drugs and those with chronic health conditions or serious illnesses can spend thousands of dollars a year outside their coverage.

Health care and the rising cost of prescription drugs are expected to be a dividing line in the 2016 campaign. Clinton's main challenger, Vermont Sen. Bernie Sanders, has campaigned on the creation of a single-payer health care system and introduced legislation earlier this month that would allow Medicare to negotiate lower drug prices with pharmaceutical companies and let consumers import prescription medication from Canada, where costs are cheaper.

While Clinton has maintained her front-runner status, she has been under pressure to take more populist stances to widen her lead over Sanders.

Her plan would prohibit what the campaign called "pay-for-delay agreements," in which the company 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 wants 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, driving down overall costs.

Consumers would also be allowed to purchase drugs from other countries, where medicine is often less expensive, so long as there are sufficient safety standards in place, Clinton's campaign said.

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