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Drug manufacturers came under fire at a hearing of the House Energy and Commerce?s health subcommittee for bumping drug prices 10 percent this year. Pharma claims rumors that it?s boosting costs in anticipation of healthcare reform are baseless, but the industry could be facing an uphill battle.
Just days after watching a $30,000-a-month chemotherapy drug receive approval; Democrats took pharma to task for bumping the price of drugs up 9.3 percent in the past year.
A subcommittee of the House Energy and Commerce Committee debated the issue at a heated hearing on Tuesday with commentary from pundits ranging from pharma economics professor Stephen Schondelmeyer to Rick Smith, senior vice president of the Pharmaceutical Research and Manufacturers of America. A vocal group within the committee noted that drug prices tend to rise when there is legislation pending, such as the case with the healthcare reform bill currently plodding through Congress. Pharma claims that the spike is due to looming patent expirations for blockbuster drugs and a slim pipeline of new drugs on the horizon.
Rep. Henry Waxman (D-CA) took pharma to task for raising prices at a time when the economy is in a slump and unemployment is high. “When it comes to prescription drugs and the drug industry, nothing surprises me anymore, but increases of this magnitude are really shocking,” Waxman said. He argued that such a n increase in drug prices increase cause a chain reaction that spikes out-of-pocket costs for drugs, as well as insurance premiums and cost to the Medicare Part D program, and forces some patients to skip their treatment.
“It’s hard to escape the conclusion that industry is positioning its pricing for enactment of the new health[care] reform legislation,” Waxman concluded.
The 9.3 percent figure being bandied about at the hearing was taken from an AARP study that examined 500 drugs (both brand-name and generic), and came to the conclusion that this is the highest annual increase in pricing since 1992.
Pharma supporters claimed that the report was flawed since it only looked at wholesale prices, which are often substantially higher than retail prices, and noted that the report had not been peer reviewed.
“The price data we used was submitted by the drug companies,” said Schondelmeyer, who authored the report. “I ask, if they are so concerned about those prices not being accurate, why are they reporting inaccurate numbers to the price database?”