Democrats in the U.S. Congress are seeking government investigations into recent price increases of brand-name prescription drugs, as lawmakers finalize an overhaul of the healthcare system.
Lawmakers are concerned the companies are trying to reap gains ahead of reforms aimed at lowering drug prices and forcing drugmakers to partly fund changes that aim to boost the number of Americans covered by health insurance.
I want to know if there's a back-door move underway by the drugmakers to recover some of the concessions they've promised for healthcare reform, said Senator Bill Nelson, who represents many older Americans in the state of Florida.
Nelson on Wednesday asked the Department of Health and Human Services' inspector general to investigate the issue.
Leaders of the House of Representatives Ways and Means and Energy and Commerce committees said in a letter to the Government Accountability Office (GAO) that they would probably seek another analysis of price trends after the health overhaul measures are implemented.
The House letter was sent late on Tuesday after the nation's top lobbying group for the elderly, the American Association of Retired Persons, earlier this week criticized an estimated 9 percent increase in prices for some of the most-widely used medicines.
Pharmaceutical Research and Manufacturers of America (PhRMA), which represents brand-name drugmakers, said the hearings were inspired by the misleading use of statistics and sensationalized media reports and that prescription drug price increases were in line with medical inflation.
Clearly, AARP has been trying to muddy the waters -- for its own political gain -- as we enter the homestretch of the healthcare reform debate, said a statement by PhRMA Senior Vice President Ken Johnson.
Companies make price adjustments independently as the result of market forces, which include everything from patent expirations to the huge, sunk R&D costs which typically exceed $1 billion for a single medicine, as well as the ability of powerful purchasers to obtain large savings, benefiting patients.
Charles Rangel and Henry Waxman, the chairmen of the House Ways and Means Committee and the House Energy and Commerce Committee respectively, wrote that drugmakers may be artificially raising prices for certain pharmaceutical products in expectation of new reforms.
Any price gouging is unacceptable, but anticipatory price gouging is especially offensive, their letter said.
Lawmakers asked the nonpartisan GAO to compare drug price increases against the Consumer Price Index and to analyze which specific drugs accounted for the biggest price changes.
The report will give Congress a benchmark of drug manufacturer pricing activity just prior to passage of a Democratic-written healthcare reform bill, the lawmakers said.
The House lawmakers also asked the GAO to prepare a proposal to continually monitor drug prices for Congress.
Industry analysts have largely expected Pfizer Inc, Merck & Co Inc and other manufacturers to boost prices of top-selling medicines that are nearing the end of their patent protection, triggering cheaper generic alternatives.
The so-called patent cliff is likely to cost top drugmakers billions of dollars in sales through 2016.
Drugmakers have largely backed Democrats' plan to overhaul the U.S. healthcare system, making a deal with some senators and the White House to provide $80 billion in savings and rebates over 10 years.
The House has already passed its bill and takes a harder line on drugmakers through additional rebates and other changes.