FOR IMMEDIATE RELEASE: January 11, 2010
SCHUMER, KLOBUCHAR REVEAL NEW GOV'T REPORT SHOWING 500% INCREASES IN PRESCRIPTION DRUG PRICES—SAY MEDICARE SHOULD BE ALLOWED TO NEGOTIATE WITH BIG PHARMA UNDER HEALTH REFORM BILL
Shocking Study By GAO Finds Drug Companies Increased Prices Between 100-500% For More Than 400 Brand-Name Drugs
In Response, Senators Urge Conferees On Health Care Bill To Allow HHS Secretary to Negotiate Drug Prices On Behalf Of Medicare Beneficiaries
WASHINGTON, DC—Today, U.S. Senators Charles E. Schumer (D-NY) and Amy Klobuchar (D-MN) revealed a new government report showing that prices for more than 400 brand-name drugs have spiked by as much as 500 percent. The senators said the alarming finding shows the need for empowering Medicare to negotiate prices with drug companies as part of the health care reform bill nearing completion on Capitol Hill.
The senators released a Government Accountability Office (GAO) report that found that between 2000 and 2008, the prices of over 400 brand-name drugs increased by at least 100 percent, and in many cases, by as much as 500 percent. The study also found that the number of huge price shocks have increased steadily over the last decade. In 2008, the prices for 71 drug products increased by 100 percent, whereas in 2000, only 28 drug product prices increased by that amount.
Schumer and Klobuchar jointly requested the report in 2008 after holding a hearing in the Joint Economic Committee (JEC) on the topic of major price increases for small-market drugs.
“It is hard to find a good-faith explanation for price increases that are this severe,” said Schumer. “This report will lead to a strong demand for action by Congress. We should make sure Medicare is allowed to negotiate drug prices in the final version of the health care bill. This reform has the potential to exert downward pressure on drug costs and save taxpayer money.”
“The extreme increase in drug prices outlined in the report is disturbing,” said Klobuchar. “This is further proof that Medicare should be allowed to negotiate drug prices, just as the Veterans Administration does. It would help save taxpayers a lot of money.”
The highest price increase found by GAO investigators was an increase of 4,200 percent. Approximately one in three drugs that saw price increases were drug treatments for central nervous system disorders, such as depression and anxiety disorders. Other drugs that saw price increases include prescriptions to treat cardiovascular issues and infections.
The senators said the report shows the need for the final version of the emerging health care bill to exert downward pressure brand-name drug prices. In particular, the House version of the Patient Protection and Affordable Care Act includes a provision that would allow the Department of Health and Human Services to negotiate prescription drug prices on behalf of Medicare beneficiaries. This measure would undo a provision in the legislation that first established the Medicare Part D program and prevented the government from negotiating prices. Schumer and Klobucher said the conferees who are currently working to merge the House and Senate versions of the bill should adopt the House’s provision to close this loophole, which could deliver Medicare savings to taxpayers.
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