Lipinski Condemns Drug Industry's Huge Price Hikes11/20/2009
"Studies publicized this week in The New York Times indicate that while other industries are slashing prices, pharmaceutical companies have raised wholesale prices for brand-name drugs by about 9 percent in the last year, the biggest increase in 17 years," Congressman Lipinski said. "These increases will tack an estimated $10 billion onto the nation's prescription drug bill. It is just more proof that the drug industry needs to be reined in, not invited into backrooms to cut deals. As the industry is well aware, millions of people, including many seniors, will have little option other than to pay these prices because their health depends on it."
The deal that the White House and the Senate cut with the drug industry as part of health care reform was supposed to result in savings of $80 billion over 10 years. The House health care reform bill is tougher on the industry, extracting an estimated $140 billion in savings over the same period. But the industry's price hikes raise the question of whether even the more stringent House legislation goes far enough in forcing the drug makers to contribute to legislation that will provide them with 30 million new customers due to the expanded availability of insurance.
Earlier this year, Congressman Lipinski introduced H.R. 2917, which would eliminate the tax break for pharmaceutical companies' advertising and promotional expenses. The pharmaceutical industry neither needs nor deserves to have its marketing expenditures subsidized by taxpayers. Drug companies have more than enough incentive to advertise. Tax break or no tax break, the dollars they spend touting their medications to the public and cozying up to physicians return to them many times over in the form of increased prescriptions and sales.
"Pharmaceutical companies may claim that they have to raise prices in order to fund research, but anyone who follows the industry knows there is reason to doubt that," Congressman Lipinski said. "The drug industry's profit margin of nearly 20 percent puts it near the very top of the rankings. One recent study estimated that pharmaceutical companies spend more on promotion than they do on research and development. If they want to spend more on research, they can start by spending less money flooding the airwaves with deceptive advertising and attempting to co-opt doctors."
"It's time to stop coddling the drug industry," Congressman Lipinski added. "It's gotten so used to getting its way in Washington that it doesn't even think twice about increasing its profits on the backs of some of our most vulnerable citizens in the midst of a recession."
(November 20, 2009)