Congress is coming back to the topic of drug price gouging on Wednesday afternoon, with the focus on Valeant Pharmaceuticals and its outgoing chief executive Michael Pearson.
Pearson is expected to testify before Congress on the topic of why he routinely raised the prices of drugs the company acquired as part of his business strategy.
Leaked testimony ahead of the hearing shows Pearson will say he regrets raising the prices of the heart medications that have been the focus of Congress’ ire. Just in time for the latest hearings comes evidence that, for all the political hollering over the issue, drugmakers don’t seem motivated to put an end to it.
The New York Times reports many major pharmaceutical companies are still raising the prices of their drugs in 2016, many with double-digit increases.
In the story, Times reporter Katie Thomas addresses another part of the debate. Drugmakers like to argue that the increases are only to the list price of a drug, which isn’t what most patients pay after insurance companies and others have negotiated rebates and discounts.
The problem, though, is that it means uninsured or others who aren’t going through those channels are paying the full price.
“It’s sort of embedded in the health care system that the price is never the price, unless you’re a cash-paying customer,” Adam Fein, the president of Pembroke Consulting told Thomas. “And in that case, we soak the poor.”
It’s true that most of the price increases aren’t grabbing headlines like the 5,000% bump to a decades-old medication did last year.
Instead, these increases are to newer drugs that don’t face generic competition yet. In a report published earlier this month by the IMS Institute for Healthcare Informatics, total spending on drugs increased about 12% in 2015.
That’s in line with how much it’s been increasing over the past few years, but well above the rate of broader price inflation.
And for the most part, that increase was driven by new drugs that were approved in the past two years.
Read the full story in the Times here.
- IMS Institute for Healthcare Informatics