NYT: Drug Makers Raise Prices 9.3% in 2009 (after PhRMA's Tauzin gave Obama gloomy forecast)

[flpoljunkie]

November 16, 2009
Drug Makers Raise Prices in Face of Health Care Reform

By DUFF WILSON

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.

Drug makers say they have valid business reasons for the price increases. Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.

But the drug makers have been proudly citing the agreement they reached with the White House and the Senate Finance Committee chairman to trim $8 billion a year — $80 billion over 10 years — from the nation’s drug bill by giving rebates to older Americans and the government. That provision is likely to be part of the legislation that will reach the Senate floor in coming weeks.

But this year’s price increases would effectively cancel out the savings from at least the first year of the Senate Finance agreement. And some critics say the surge in drug prices could change the dynamics of the entire 10-year deal.

“It makes it much easier for the drug companies to pony up the $80 billion because they’ll be making more money,” said Steven D. Findlay, senior health care analyst with the advocacy group Consumers Union.

Billy Tauzin, president of the industry’s trade association, highlighted the gloomy prediction in a June 1 letter to President Obama shortly before striking the deal to cut drug costs by $80 billion. In negotiating the deal, the drug makers argued that they could not afford to give up more than that.

But in October, IMS made an unusual change in the middle of its forecasting cycle, saying it now believed United States sales would grow at least 4.5 percent in 2009 — or $21 billion more than expected six months earlier.

A major reason, IMS said, was higher-than-expected price increases for drugs in the United States.

http://www.nytimes.com/2009/11/16/business/16drugprices.html?hp

[AzDar]

1. These parasites are NOT to be trusted. The President surely must know that...

:grr:

[valleywine]

2. Pharm has similarities to the credit card bill-Raise prices before the deadline....

I really do not know why the WH thinks they can bargain in good faith with Big Pharm.

[AndyA]

3. So, they agree to trim $8 billion, then turn around and give themselves a $10 billion RAISE!

So, they just increased their profits by $2 billion.

Fuck you, America.

Love, Your Pharmaceutical Companies with the help of your elected Congress

[quantass]

4. Remind me again why these guys are the Bad Guys -- This is ALL Expected

Let's get real...Big Pharma, like any other corporation is doing what they were meant to do...make profit...by any means....they are doing exactly what any one could have predicted they would do. THe naivete lies with the WH if they thought anything less...but i strongly believe the WH isnt this stupid to think that this wouldnt have happened.

The real criminals here are Washington for giving these corporations the ability to do such thing while turning a blind eye. This problem can be easily fixed but until Washington wants to fix it then to me they are the real devils in this game.

On the plus side, the more greed takes hold of Big Pharma the more it angers the people and ultimatley the game will be up and Washington will have to reluctantly do as the people say.

[flpoljunkie]

5. As long as lobbyists fill their campaign coffers, Congress will do corporate interests' bidding.

Congress has not moved forward on federal financing of their campaigns this year--altho there are companion bills in the House, H.R. 1826 and Senate, S.752. It is not in their interest to do so as they do not want to level the playing field. They evidently would rather burden themselves with the onerous daily task of raising money from the same corporate interests who are working very hard to stop meaningful financial and health care reform.