Reports that drug prices have risen nearly 10 percent this year put the pharmaceutical industry under the microscope this morning. Last month the AARP released a report on the rapidly-rising cost of drugs; that report prompted lawmakers to take a closer look at how much companies are charging for drugs. And this morning the House Energy and Commerce Committee's Subcommittee on Health held a hearing to investigate what's behind the recent price increases. In the past 12 months, wholesale prices of branded meds have grown by about 9 percent, adding more than $10 billion to U.S. drug spending.
Critics attribute the rapidly-rising price of drugs to the patent cliff and healthcare reform. They say drugmakers are jacking up the price of drugs in anticipation of some of their bestsellers going off-patent in the next few years. And it wouldn't be the first time companies raised prices before major legislation passed; previous GAO investigations found that drug prices grew faster during years prior to the Medicare Part D drug benefit.
However, at this morning's hearing a PhRMA spokesperson maintained that pricing decisions were made independently of reform. "These reports do not reflect the way that the prescription drug market functions and therefore exaggerate prescription drug price trends," said Rick Smith, senior vice president of policy at PhRMA, according to Reuters.
Lawmakers have already wavered on the $80 billion cost-cutting deal they struck with the pharma industry--a deal that was supposed to protect drugmakers from certain aspects of reform. But a group of bipartisan senators is pushing for an amendment to the healthcare reform bill that would allow the government to import less expensive drugs from other countries. That could cut seriously into the industry's bottom line. So whether intentional or unintended, the rapid rise in drug prices isn't making things any easier for the pharma industry.
- click here to read prepared testimony for the hearing
- here's the Reuters report