Drug makers attract scrutiny over cost and ads, but may benefit from overhaul

Drug makers came under scrutiny after the AARP published research recently showing their wholesale prices had increased by an average of 9.3 percent during the past year, offsetting the value of rebates the industry promised as part of a health care overhaul to help seniors pay for drugs. The New York Times reports that the study was exhibit A at a House hearing Tuesday, which disintegrated into "many people talking past one another." Republicans accused AARP, the retiree's lobby, of using the report to promote its own interests, while a leading Democrat said drug makers were "playing a shell game" (Wilson, 12/8).

Congress isn't the only branch of government scrutinizing the pharmaceutical companies. The Food and Drug Administration sent "about three dozen" warning letters to drug companies complaining about their advertising practices so far this year, more than a 50 percent increase compared with last year, the St. Louis Post Dispatch reports. One ad suggested an athlete's foot drug, Etaczo, may "Crush," "Kill" and "Destroy" fungus, but the FDA said that "greatly overstated" the drugs effectiveness. That scrutiny has led the companies to pursue laxer regulation for online ads, but Congress instead is considering new curbs to their ad practices (Lambrecht, 12/9).

That's not to say there are no bright patches for pharmaceutical companies in recent politics. Bloomberg reports, "Health-overhaul legislation, now being debated in Congress, would create the first U.S. regulatory process to copy biotech drugs, opening a market worth $10 billion in the next decade." Pfizer, the biggest drug maker, plans to begin capitalizing on that change within five years, a company official said (Pettypiece, 12/9).

Also, drug makers may have a surprise ally in their opposition to legislation that would allow the importation of lower-cost drugs, which could be considered in the Senate Wednesday as part of the overhaul debate, the Associated Press reports. "President Barack Obama's administration is raising safety concerns that could effectively scuttle it, even though Obama backed the plan as a senator. Some import supporters question whether the administration is acting to keep the powerful pharmaceutical industry's support for Obama's effort to overhaul the nation's health care system. An administration official denied that" (Fram, 12/9).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.