facebook Report: Drug makers inflated prices to boost profits. Shocked?

BIG PHARMA POLITICS: Consumers pressure politicians to do something about rising drug prices. Read More

Report: Drug makers inflated prices to boost profits. Shocked?

Patents make big profits for Big PharmaA new report from the U.S. House Oversight and Reform Committee found that major pharmaceutical companies raised drug prices exponentially to boost profits and bonuses for executives.

The findings are from an 18-month investigation into a dozen drug companies’ pricing practices, released before two days of congressional hearings with Big Pharma executives.

Politico reports that the Democrat-led investigation found that Celgene raised the price of its cancer medicine, Revlimid, 22 times since 2005, more than tripling the price. These hikes were not linked with rising costs or innovation. Instead, they were increased so the company could meet its quarterly revenue targets, according to its former CEO, Mark Alles.

“I have to consider every legitimate opportunity available to us to improve our Q1 performance,” Alles wrote in an email obtained by Politico. He appeared before the committee in early October.

During the hearing, Alles confirmed that despite the price increases, the manufacturing for the drug remained the same.

Revlimid, a chemotherapy drug, now costs more than $16,000 a month.

Drug manufacturer Teva also raised the price of Copaxone, prescribed to patients with multiple sclerosis, 27 times since its launch in 1997, inflating the cost from $10,000 to nearly $70,000. Bonuses for Teva workers also soared, and the committee’s report notes that “lower-level employees were aware of the direct link between their compensation and Copaxone’s price and revenue.”

The investigation “demonstrates that drug companies are taking full advantage of the federal law that currently prohibits Medicare from negotiating directly with drug companies to lower prices,” Oversight Chair Carolyn Maloney (D-NY) said in a statement.

Do you think the federal government should make changes that lower the cost of prescription drugs? Share your thoughts with Voices for Affordable Health.