Monday, July 28, 2008

Ouch! That's gotta hurt.


US federal agencies have been asked to investigate “price-gouging” by pharmaceutical companies which have been increasing the prices of long-established drugs “to the very highest levels the market will bear,” Senators have claimed.

Such practices “look uncomfortably like an abuse of the pricing power we give to drug companies,” said Democratic Senator Charles Schumer, chairman of the Senate Joint Economic Committee, which held a hearing late last week to investigate the alleged practices.

Specifically, the hearing sought to examine the price increases which have been imposed on orphan drugs. Democratic Senator Amy Klobuchar, who chaired the hearing, stated that “at least a handful of drug companies” have used the status assigned to these products by the 1983 Orphan Drug Act to keep on increasing their prices, at levels well beyond the costs of their research, development and manufacturing.Because of limited market or other factors, these drugs’ prices are more likely to remain at these “astronomical” levels, she added. Moreover, not only do these “staggeringly high costs” threaten the stability of the families who rely on them, but also a “dramatic unforeseeable increase in price for one of these drugs has a significant impact on the federal government.

If the wholesale cost of a drug goes up, Medicaid or Medicare has to pay for the increase,” said Sen Klobuchar, who added: “this seems like simple price-gouging to me.”

No comments: