Will health reform push up drug prices?
Drug makers are raising prices in advance of the health-care overhaul in Congress. Why? Nancy Marshall Genzer reports.
Roll of bills pours out pills (iStockPhoto)
More on Health
TEXT OF STORY
Kai Ryssdal: Changing health care in this country is going to be an expensive proposition. Somewhere between $800 billion and more than a trillion dollars, according to the Congressional Budget Office. Those costs will eventually trickle down to taxpayers. But there may be some other expenses as well.
Drug prices have been going up as the health-care debate has raged on, and before possible government cost controls kick in. Marketplace's Nancy Marshall Genzer reports.
NANCY MARSHALL GENZER: Drug makers cut a deal with the White House earlier this year. They promised $80 billion in cost reductions over 10 years in exchange for their support of a health care overhaul. But they've also been raising prices. The New York Times reports, drug prices have gone up about 9 percent over the past year.
Steven Findlay is a health policy analyst with Consumers Union. He says the price hikes are directly tied to the health-care legislation.
STEVEN FINDLAY: It does indicate an industry who's thinking that it's going to have to lower prices in the future, and therefore it'll just jack them up right now.
Drug makers, who made billions in profits last year, say that's flat wrong. They point to the cost of research and development. And rebates they give to distributors.
Chris Conover teaches public policy at Duke University. He says maybe drug makers did raise prices to cover the costs of the health care overhaul. What's wrong with that?
CHRIS CONOVER: Drug manufacturers may legitimately be concerned about what's going to happen. There's going to be a lot of pressure on the government to try to rein in the costs of medical care services.
If all this sounds familiar that's because credit-card companies raised their fees in anticipation of a new consumer-protection law.
Ira Rheingold keeps an eye on banks and pharmaceutical companies for the National Association of Consumer Advocates.
IRA RHEINGOLD: They've got their hand caught in the cookie jar. Before the cookie jar closes, they're attempting to milk every last penny out of consumers' pockets.
So, Rheingold says, consumers end up paying for the very reforms that are supposed to protect them.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
Comments
Comment | Refresh
11/17/2009
So, they raise prices now by let's say 10%, then when its time to lower their prices, they'll lower them by 10%...back to the original price.
Is it just me...or is this obvious to everyone else, too?
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.