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Wednesday, Nov. 25, 2009

Our View: Firms pulling a fast one

Big drug companies increased medication prices this year ahead of vote on overhauling health care.

Is the support of the pharmaceutical industry needed for Congress to pass health care reform? Or is the price of that support too high for the people the reform package is trying to help? Those questions took on new urgency with the release of an AARP study finding that drug makers had raised the wholesale price of brand-name drugs by 9 percent, or $10 billion, in the past year. That's the biggest price increase in 17 years.

What particularly outraged opponents of "Big Pharma" is that the industry's lobbyists had made a deal with the Obama administration and key Senate leaders to do just the opposite. In agreeing to support the health care overhaul, the pharmaceutical industry pledged to cut up to $80 billion in prescription costs over the next decade -- although many of the details of how this would be accomplished were never made public.

In return, Medicare, a huge buyer of prescription drugs, was barred from negotiating lower prices or directing recipients away from expensive medicines when cheaper, equally effective options were available.

For certain House Democrats, the prescription price hike was more evidence of the industry's chicanery. That distrust is the main reason the House didn't sign on to the Obama administration's deal, and came up with its own list of ways to cut drug company payments.

A key source of conflict: The multibillion-dollar payments the drug industry began receiving when 6.4 million low-income people were transferred from Medicaid -- the government health program for the poor -- to Medicare in 2006.

The Senate is beginning debate on its own version of health insurance reform. Undoubtedly, some senators will offer amendments that will allow the government to negotiate lower drug prices under Medicare.

The pharmaceutical industry stands to gain more than 30 million new customers under this legislation. The industry must be relishing the opportunity to rip them off, too.

It's time to hold drug companies responsible for their price gouging.

Editorials are the opinion of the Merced Sun-Star editorial board. Members of the editorial board include Publisher Hank Vander Veen, Executive Editor Mike Tharp, Editorial Page Editor Keith Jones, Copy Desk Chief Jesse Chenault and Online Editor Brandon Bowers.