Pharmaceutical industry spokesmen must use Botox. How else could they keep a straight face while explaining that their employers raised prices by an average of 9 percent this year, the biggest single increase in nearly two decades, because they need to invest in the research and development of new drugs?
Earlier this year, credit card holders started receiving letters announcing huge increases in interest rates on outstanding balances, reduced rewards, higher fees and accelerated payment dates. Why? Because credit card reforms Congress enacted to rein in the rapacious industry are scheduled to go into effect in January. Last month, the Pew Health Group's Safe Credit Card Project reported that 100 percent of the credit cards offered by major issuers online included practices that will be banned.
In response to the rate increases, the House, in a measure supported by Reps. Paul Hodes and Carol Shea-Porter, passed legislation moving the effective date of the reforms to Dec. 1. The Senate has yet to act, but it should. Now that drugmakers are pulling the same stunt as credit card companies, Congress should revisit the deal it made with them in exchange for their acquiescence to health care reform.
Drugmakers want to install a new and higher price floor before Congress begins chipping away at the prescription drug component of unsustainably high health care costs. The industry agreed to reduce drug costs by $80 billion over the next decade because that loss would have been more than offset by the higher number of people who would have prescription drug coverage after health care reform. But this year's drug price increases will wipe out the sacrifice the industry made with its promise to reduce drug costs by $8 billion per year.
Some members of Congress are calling for an investigation into the price increases. A close look could show that some of the price increases were justified. But if, as many suspect, the increases are driven by little more than greed, Congress should take a scalpel to its deal with the drug industry.
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Hear hear!
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