The New York Times reports that drug companies have raised prices of wholesale brand-name prescription drugs by about 9% this year, which is the highest increase since 1992.
The drug trend is distinctly at odds with the direction of the Consumer Price Index, which has fallen by 1.3 percent in the last year and contradictory to the 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 drug companies say the increase in prices is necessary so they can invest in research and development of new drugs, as the patents on many of their most popular drugs are set to expire over the next few years. But critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.
A Harvard health economist, Joseph P. Newhouse, said he found a similar pattern of unusual price increases after Congress added drug benefits to Medicare a few years ago, giving tens of millions of older Americans federally subsidized drug insurance. Just as the program was taking effect in 2006, the drug industry raised prices by the widest margin in a half-dozen years.




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[...] in Congress asked for two separate investigations of drug industry pricing Wednesday following news reports of unusually high wholesale price increases in brand-name prescription drugs. Four House leaders [...]