Kamala Harris wants to cut drug prices and tax ‘price-gouging’ companies

Democratic presidential candidate and California senator Kamala Harris
Presidential candidate Sen. Kamala Harris campaigns in Cedar Rapids, Iowa.
(Scott Olson / Getty Images)

Democratic presidential candidate Kamala Harris rolled out a policy blueprint to slash prices for prescription drugs when they cost less in other developed countries or when their price climbs faster than inflation.

The California senator’s proposal would give the Department of Health and Human Services authority to set a “fair price” for drugs on the basis of average costs in countries under the Organization for Economic Cooperation and Development, such as Canada and France. Profits from sales above that level would be taxed at 100% and the proceeds would be returned to consumers in the form of rebates.

Rising drug prices are among the most politically thorny pocketbook issues facing Americans. President Trump has promised to tackle the issue but has done little so far, and his proposal to require drug companies to disclose their list prices in advertisements suffered a court setback.

Trump made allowing reimportation of cheaper drugs from other countries a theme of his 2016 campaign, saying it was time to “step away from the special interests and do what is right.” But he began vacillating on that plan shortly after taking office amid opposition from drug companies. He has since proposed and retreated from other initiatives that would cut costs.

Harris, who is set to discuss her plan Tuesday at a forum hosted by AARP in Davenport, Iowa, said she wants to take on the “massive profits” of drugmakers.


“This plan puts people over profit by forcing these companies to reduce prices for consumers and holding them accountable when they gouge Americans,” she said in a statement.

Her proposal would eliminate a tax break drug companies receive to offset direct-to-consumer advertising costs that totaled $6 billion. It mirrors legislation proposed by several other Democratic senators that has failed to pass the GOP-led chamber. Harris is proposing to direct the extra revenue to boost funding for the National Institutes of Health.

The Harris campaign said that if Congress fails to act in the first 100 days of her presidency, she would take executive action to investigate major drugmakers that are “price-gouging patients.” They would be subjected to regulatory action, such as allowing the importation of cheaper alternatives, if they don’t lower prices.

Progressive healthcare advocates praised Harris’ proposal.

“It has the ambition to comprehensively solve the problem,” said Topher Spiro, the vice president for health policy at the Center for American Progress. “The Trump administration is only talking about a small sample of Medicare drugs. This proposal applies across the board — Medicare, Medicaid, employer plans and all private insurance.”

Democrats are jousting over their healthcare proposals. Candidates including Elizabeth Warren and Bernie Sanders embrace a “Medicare for all” system that would eliminate most private insurance. Others, including front-runner Joe Biden, seek to preserve Obamacare but would add on new government-run options in an effort to maximize consumer choice.

Harris says she prefers a system like Medicare for all but has cosponsored legislation that would set up a limited “public option” and maintain the Affordable Care Act.