December 13, 2021
House Oversight Committee: Drug Prices are “Unsustainable, Unjustifiable and Unfair”
The pharmaceutical industry relies on drug-pricing practices that are “unsustainable, unjustified and unfair,” according to findings from a nearly three-year investigation by the House Oversight Committee.
The conclusions, released Friday, show that corporations studied by the committee raised prices of common brand-name drugs during the past five years by nearly four times the rate of inflation. The report debunks industry contentions that corporations’ price strategy is necessary to put money back into researching and developing new medicines, finding that revenue is substantially greater than those investments.
In addition, analysts with SVB Leerink, an investment bank specializing in health care, have calculated that eighteen large U.S. and European biopharmaceutical corporations will have more than $500 billion in cash on hand by the end of 2022. Because the companies can leverage their assets to borrow additional capital, the 18 drugmakers’ actual capital would be more than $1.7 trillion, the analysts wrote.
Media that covers the industry say that the report indicates the corporations are likely to use much of this windfall to give dividends to shareholders and/or stock buybacks. This also flies in the face of industry spokespeople who often claim their large windfalls are necessary for Research and Development.
“The report and data make it clear: drug corporation profits are outrageously high and the American people are paying too much for their prescriptions. Congress must do the right thing by finally acting to lower prices through the Build Back Better Act,” said Joseph Peters, Jr., Secretary-Treasurer of the Alliance. “The industry can clearly afford to stop gouging seniors for the medicines they need.”