Investigators Say Price Hikes on Drugs Increasing
From Associated Press (January 11, 2010)
WASHINGTON_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.
But congressional investigators acknowledged that drugmakers often
aren't to blame for the steep increases. More than half of the
price hikes cited in the GAO report came from suppliers who
repackage drugs for use by patients, according to the report.
Repackagers can include HMOs, pharmacies and stand-alone
companies.
"Proponents of repackaged drugs believe that they offer convenience
to patients and may reduce medication errors," states the report.
"However, some experts suggest that repackaging drugs may
unnecessarily increase drug prices and profits."
In other cases, GAO said there simply isn't enough competition to
drive prices down for certain niche medicines. The group said
consolidation in the drug industry means large drugmakers have
bought up entire groups of similar drugs, allowing them to charge
higher prices.
The Pharmaceutical Research and Manufacturers of America said the
drugs cited by GAO represent a fraction of the overall
pharmaceutical market. The group pointed to a government report
issued last year showing total drug prices grew just 3.2 percent in
2008, the lowest pace in 50 years as use of low-cost generic drugs
increased.
The GAO's report was requested by Sen. Charles Schumer, D-N.Y.,
vice chairman of the Joint Economic Committee.
"It is hard to find a good-faith explanation for why drug prices
could go up this much," Schumer said in a statement.
At the request of Senate Democrats, the Department of Health and
Human Services' inspector general plans to investigate whether drug
companies are raising prices of prescription drugs ahead of passage
of the health care overhaul plan.
The drug industry lobby says the requested investigation is based
on misleading data.
Posted: January 2010
