Monday, November 16, 2009

This Is Part of What We're Up Against

From the NYT: Drug Makers Raising Prices Before Reform
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.
So the trick seems to be this: promise $80 billion in cuts over 10 years, then raise prices before the legislation takes effect. That way the whole first year "savings" is really just getting us back to where we started. A retailer I used to work for had a similar practice. They'd raise prices right before a sale so that the "sale" prices we'd mark with colorful stickers were the regular prices of just a few days before.

It's weasely with consumer goods -- and borderline immoral for pharmaceuticals.

Yes, companies are allowed to make profits. But considering that the Consumer Price Index has decreaed by 1.3% in the past year AND similar drug price increases were seen just before Medicare added drug benefits a few years ago, I'd say it's highly likely we're dealing with weasels here.


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