US Democratic presidential candidate Hillary Clinton has proposed a US$250 monthly cap on out-of-pocket prescription drug costs and other measures to stop what she called “price gouging” by pharmaceutical companies. At a campaign stop in Iowa, Clinton rolled out 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 chronic or serious medical conditions. “We need to protect hard-working Americans here at home from excessive costs. Too often these drugs cost a fortune,” she said in Des Moines on Tuesday, adding drug companies keep the profits for themselves while “shifting the cost to families”. The Nasdaq Biotechnology index closed down 1.7 per cent on Tuesday after falling as much as 3.5 per cent during the session. It had already fallen 4.4 per cent on Monday after Clinton tweeted her intent to tackle high prices of some drugs. Citi biotechnology analyst Liav Abraham said that with 2016 presidential candidates taking on steep drug pricing, “companies with less differentiated, more concentrated product portfolios are likely to come under increased political scrutiny.” But the rhetoric may have “more bark than bite”, he said, since the reforms would require approval by a Republican-dominated Congress that is unlikely to implement them. While Clinton has maintained her front-runner status in the Democratic race, she has been under pressure to take more populist stances to widen her lead over US Senator Bernie Sanders, her second-place rival who has also offered a plan to rein in prescription drug 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 US Constitution. Clinton said the government could get billions of dollars in additional tax revenue by no longer allowing pharmaceutical companies to deduct what they spend marketing drugs to consumers. The largest pharmaceutical companies are collectively earning US$80 billion to US$90 billion per year at higher margins than other industries while average Americans struggle to pay for medicine, Clinton’s campaign said. Clinton also proposed a ban on “pay-for-delay agreements”, in which the owner 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. Drugmakers are unapologetic about their five- or six-digit prices on new treatments for cancer, hepatitis C and high cholesterol. Sovaldi, a treatment from Gilead Sciences Inc , can cure hepatitis C but at a cost of US$1,000 per pill.