[Ip-health] Pharmaceutical Companies Continue To Raise Prescription Drug Prices Despite Presidential Candidates' Criticism Of Industry

[Joana Ramos]

 http://www.medicalnewstoday.com/articles/98208.php

Pharmaceutical Companies Continue To Raise Prescription Drug Prices
Despite Presidential Candidates' Criticism Of Industry
Medical News Today
22 Feb 2008

The prices of brand-name medications have continued to increase despite
calls from all three major presidential candidates for pharmaceutical
companies to make their products more affordable, the Wall Street
Journal reports. Wholesale prices for the 50 brand-name medications with
the most sales increased by an average of 7.82% in 2007, compared with
increases of 6.73% and 6.22% in the previous two years, according to
Delta Marketing Dynamics. The overall U.S. economy had an inflation rate
of 4.1% in 2007.

In some cases, pharmaceutical companies have increased the prices of
brand-name medications scheduled to lose patent protection to prompt
patients to switch to similar, newer products that will have patent
protection for a number of years. William Little, president of Delta,
said, "Companies are under great pressure to deliver revenue, and it's
becoming increasingly difficult to do so as generics displace profitable
brands."

However, such price increases could "backfire politically, pushing
policies toward greater government power over price negotiations,"
according to the Journal. Presidential candidates Sens. John McCain
(R-Ariz.), Barack Obama (D-Ill.) and Hillary Rodham Clinton (D-N.Y.)
have criticized pharmaceutical companies over the high prices of the
products and have announced proposals to address the issue.

McCain has said that he supports the legalization of prescription drug
reimportation from Canada to reduce costs and "keep competition
vigorous," and Obama on his Web site promises to "prevent (drug)
companies from abusing their monopoly power through unjustified price
increases." In addition, Clinton and Obama both have said that they
support proposals to allow the federal government to negotiate prices
directly with pharmaceutical companies under the Medicare prescription
drug benefit.

According to some analysts, pharmaceutical companies have increased the
prices of brand-name medications to "protect their margins in case the
Medicare effort and others like it succeed," the Journal reports.

Comments
Jeff Nelligan, a spokesperson for CMS, said, "Allowing the government to
negotiate drug prices would not generate additional savings" under the
Medicare prescription drug benefit because the program "relies on health
plans and their related pharmacy benefit managers to negotiate deep
discounts with manufacturers."

Officials for the Pharmaceutical Research and Manufacturers of America
said that the prices of brand-name medications "are determined by market
transactions, and health plans are able to negotiate for discounts,"
adding that Medicare and Medicaid beneficiaries "have benefited from our
competitive market approach."

Raymond James analyst John Ransom said, "Direct negotiations clearly
could save the feds money, the concept being that the government makes
almost 50% of purchases, and accordingly have almost fiat-like power to
set their purchase price wherever they wish" (Won Tesoriero, Wall Street
Journal, 2/21).

Reprinted with kind permission from http://www.kaisernetwork.org. You
can view the entire Kaiser Daily Health Policy Report, search the
archives, or sign up for email delivery at
http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily
Health Policy Report is published for kaisernetwork.org, a free service
of The Henry J. Kaiser Family Foundation=A9 2005 Advisory Board Company
and Kaiser Family Foundation. All rights reserved.

Article URL: http://www.medicalnewstoday.com/articles/98208.php

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Joana Ramos, MSW
Cancer Resources & Advocacy
Seattle WA USA
+1-206-229-2420
http://ramoslink.info/
www.bmtbasics.org