House Democrats criticize recent increases in brand-name drug prices

The Wall Street Journal: "Reports of prescription drug-price increases have congressional Democrats complaining about price gouging and questioning whether drug companies are reneging on a pledge to provide billions of savings as part of a U.S. health-care overhaul sought by President Barack Obama. Prescription drugs account for about 10% of U.S. health-care spending and prices appear to be increasing rapidly, Rep. Frank Pallone, (D., N.J.), chair of the House Energy and Commerce Committee's health subcommittee, said at a hearing Tuesday." Commerce Committee Chairman Henry Waxman (D., Calif.) called attention to an AARP study which indicated that people were paying 9% more for brand-name drugs even though consumer price inflation has fallen in the past year. Waxman also estimated that increase "boost drug company revenues by $20 billion this year, undercutting the industry's promise to provide $80 billion of savings over 10 years as part of a broader U.S. health care overhaul." But "critics questioned the AARP study, which looked at more than 500 drugs, including 219 brand name products accounting for nearly 82% of prescription drug expenses" (Burns, 12/8).

Reuters: "Pharmaceutical companies defended themselves on Tuesday against complaints of rising medicine prices that could re-establish the drug industry as a political target in the U.S. health reform debate. An early deal with Democrats had largely shielded the $315 billion industry, but recent reports from Wall Street and consumer groups that drug prices have risen nearly 10 percent this year brought the companies under a harsh spotlight. ... At the same time, the industry braced for a bipartisan push in the Senate to allow the importation of cheaper medicines from Canada and other countries as part of the larger health reform legislation."

"Some market analysts have forecast higher U.S. drug sales as companies seek to squeeze earnings from dozens of widely used medications before they hit the so-called 'patent cliff' and face cheaper rivals. ... Democrats and consumer groups charge the pharmaceutical industry is profiteering ahead of anticipated reforms that could reduce industry profits through larger government rebates from the drugmakers, as well as other concessions" (Heavey, 12/8).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.