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Drug Makers Run Up Prices Before Health Care Reform Passes

Even as drug makers promise to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years.

In the last year, the industry has raised the wholesale prices of brand-name prescription drugs by about 9 percent, according to industry analysts. That will add more than $10 billion to the nation’s drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992.

The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year.

Stephen W. Schondelmeyer, a pharmaceutical economics professor at the University of Minnesota, said, “Whenever we have major legislation anticipated, we see a run-up in drug price increases.”

Thanks to the New York Times

3 comments to Drug Makers Run Up Prices Before Health Care Reform Passes

  • karl

    I have to say I was less then impressed with president obama regarding this deal he made with big PhARMA ($80 billion drug cost reduction). The pharmaceutical industry/companies are in the top two or three most profitable industries in the U.S. In 2008, according to Fortune… profits of the top 10 drug makers alone came to $50 billion dollars and that’s after paying huge profit payouts to corporate executives. There’s two informational stories I find somewhat interesting about the pharmaceutical industry:1) is the huge MEDiCARE D program that I now hear will cost in the range of $7 trillion dollars maybe more that’s according to the GOA.Why do I bring that up well it has non-bid/compete clause(s). It’s not “free market” and that’s a problem for cost containment. This legislation was passed during the Bush administration. 2) Of the 20 False Claims Act cases……. 12 involved the judgements/settlements with pharmaceutical industry. There’s several articles about these cases. GOOGLE pharmaceutical whistleblowers. Many of these cases involved the PhARMA companies pushing the use of their drugs to treat conditions for which the drugs were not approved. Pfizer just had a judgement accessed to them for $2 billion dollars. The pharmaceutical industry is one of the players that will make this health care insurance cost reform a very difficult legislation/bill to pass.

  • This reminds me of how big oil ran up the prices in the last months of Bush’s time in office. It’s nice to have friends in high places. They’re all in collusion with each other.

  • What scares me about health care reform is the politics. It’s really not about the reform, it’s about positioning special interest to benefit from the fallouts of the changes.

    REPLY: Unfortunately, that’s the nature of the human beast. There’s no avoiding it. That’s why it’s important to support our National Associations, so that conservative chiropractic care is appreciated as the cost-effective alternative solution for many costly musculoskeletal conditions.

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