Recent spikes in prescription-drug prices may be an attempt by the industry to “maximize profits in advance of healthcare reform,” Rep. Frank Pallone (D-N.J.), said during a hearing held by the House Energy and Commerce Subcommittee on Health.
Pallone, who chairs the panel, specifically highlighted research by Stephen Schondelmeyer, professor of pharmaceutical management and economics at the University of Minnesota. Schondelmeyer testified that brand-name drug prices on average increased by 9.3% over the past year, “higher than the rate of increase observed during any of the prior seven years.”
The research suggests “that there is a link between spikes in prescription drug prices and when there is legislation pending that impacts the pharmaceutical industry’s bottom line, such as the various healthcare reform bills currently moving through Congress,” said Pallone, who called for better reporting and more transparency by the industry.
Richard Smith, senior vice president for policy and research with the Pharmaceutical Research and Manufacturers of America, testified that prescription drug costs have in fact slowed down. The most recent data issued by the CMS on national health expenditures reported that drug-cost growth in 2007 was 4.9%, the lowest rate since 1963, Smith said.