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Bernie Sanders, California Dropped A Grenade On Gilead

Summary

A California initiative -- California Drug Price Relief Act -- would prohibit state agencies from paying more for prescription drugs than the VA.

Senator Bernie Sanders has thrown his support behind the Act.

The Act could put a dent in prices for prescription drugs like HCV and HIV/AIDS.

If the Act gains traction nationwide it could sink GILD.

Bernie Sanders has gone too far this time.

Source: The New Yorker

In September Hillary Clinton put the healthcare industry on notice pursuant to price gouging. She may have been trying to upstage Senator Bernie Sanders after his HCV rant four months earlier. Sanders thought veterans deserved the world's best HCV treatment -- Gilead's (NASDAQ:GILD) Harvoni -- at a reasonable price; I agreed with him. Market chatter suggested the VA garnered HCV drugs at $40,000 per regimen. Gilead intimated it cut the price even further in Q1 in order to woo the VA back.

Sanders may have gone too far this time. He is backing the California Drug Price Relief Act ("CDPRA" or "the Act"), which could allow the state to pay the same price for drugs as the VA:

Now he [Sanders] is throwing his support behind a California ballot initiative that is being furiously opposed by drug makers who fear the proposal to limit drug prices, if passed, could spark a national movement. The California Drug Price Relief Act, which will be voted on in November, would prohibit the state from paying more for a prescription drug than the lowest price paid for the same drug by the U.S. Department of Veterans Affairs. The department has the power to negotiate lower prices for medications ...

One Republican drug lobbyist, speaking anonymously, told Politico the initiative was "a grenade being rolled into the conversation," and is being taken very seriously by the industry.

According to Politico the drug industry has set aside $100 million to fight...


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