Big Pharma’s Skyrocketing Prices

The AP reported yesterday on a new Government Accountability Office (GAO) report on soaring drug prices:

Prices on a growing number of prescription medications have ballooned in recent years as consolidation in the drug industry leaves fewer companies manufacturing niche medications.

Congressional investigators say the number of extraordinary price hikes on drugs doubled between 2000 and 2008. The drugs affected are mostly specialty medications but also include some popular products like Bayer’s antibiotic Cipro and the Eli Lilly schizophrenia treatment Zyprexa.

The Government Accountability Office report issued Monday attributed the rise to a combination of factors, including industry consolidation and price hikes by third-party providers who repackage drugs for patients.

The GAO’s findings could put new pressure on drugmakers to contribute billions more to the health care reform effort being finalized by Congressional Democrats.

The drug industry originally pledged $80 billion to defray the costs of covering millions more Americans, but the package being negotiated between the House and Senate is expected to call for well over $100 billion in financing from drug companies.

GAO found more than 400 examples of unusual price jumps on brand name drugs during the eight-year period — most ranged from 100 to 499 percent, but several exceeded 1,000 percent.

Unsurprisingly, the drug industry lobby Pharmaceutical Research and Manufacturers of America (PhRMA) “says the requested investigation is based on misleading data.”

What I’m waiting to see is whether these findings actually do inspire the Democrats to “put new pressure on drugmakers to contribute billions more to health care.” As I’ve written before, Big Pharma’s $80 billion “gift” to health care reform is a Trojan horse. And measures that might actually cut into their still-wide profit margin–like government price controls–are weak in the House’s bill, and absent altogether from the Senate’s.

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