STARK AND OTHERS SEND LETTER TO GAO TO INVESTIGATE CLAIMS
In an instance of dynamic journalism Monday, The New York Times blew the cover on Big Pharma’s price-gouging gambit in the face of health care reform. The piece was so harrowing to the pharmaceutical companies that the Big Three in the House Ways and Means Committee, including Rep. Pete Stark took immediate notice.
Along with Rep. Charles Rangel (D-NY), Rep. John Lewis (D-GA) and House Energy and Commerce Chair Rep. Henry Waxman (D-Calif.) fired off this letter yesterday to the acting comptroller of the General Accounting Office which called for an analysis of the Times’ claims that pharmaceutical companies are raising drug prices in anticipation of losses from health care reform legislation passed last week by the House and waiting for debate in the Senate.
The pharmaceutical industry has been monitoring this legislation closely, and recent studies have indicated that the industry may be artificially raising prices for certain pharmaceutical products in expectation of new reforms that could otherwise reduce prescription drug prices or price growth by encouraging patients and the government to be more efficient purchasers. Any price gouging is unacceptable, but anticipatory price gouging is especially offensive. We request that the GAO prepare on an expedited basis a report that analyzes recent trends in prescription drug pricing.
According to the Times, drug companies have raised prices on wholesale brand name medications by nine percent and could add more than $10 billion to the nation’s expenditures for drugs. They also cite two professors who say their analysis of drug prices prior to past legislation show price increases are common. The article also mentions the existence of the inflated prices may be why Big Pharma was so amendable to the Obama administration’s demands to cut drug prices by $80 billion over the next 10 years.
Today, Sen. Harry Reid (D-Nev.) announced a Senate bill similar in price to the House that would cost $894 billion over 10 years. According to reports, the bill includes a public option, but allows states an option to opt-out.
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