Has the public and political outcry regarding drug price hikes had any effect on the pharmaceutical industry?
On one hand, Michael Pearson, the outgoing CEO of Valeant, one of the pharmaceutical companies that Congress is scrutinizing over its dramatic price hikes, is expected to issue a mea culpa Wednesday in testimony before a Congressional panel over his company's pricing strategy.
"I recognize that we therefore need to work to regain the confidence of Congress, the public, doctors and patients," Pearson will say, according to prepared remarks released to media.
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But other drug companies that have not been featured as prominently in industry criticism have continued to raise prices. Many of the biggest players in the pharmaceutical industry have unveiled double-digit increases since the beginning of the year, the New York Times reports.
A recent report by IMS Health found that the list price for medications rose 12 percent in 2015.
"It used to be the drug companies only took one price increase a year," Dr. Steve Miller, chief medical officer at Express Scripts, told the Times. "Now what they're doing is taking multiple price increases multiple times a year."
But there's a key caveat in the findings about the rise in drug prices: The list prices often do not correspond to what consumers are actually paying.
In fact, the same IMS report found that the average price that insurers and other payers are spending for drugs only went up 2.8 percent. Granted, that's still higher than the rate of inflation in 2015 (0.73 percent).
Some contend that drug companies are dramatically raising the list price because it's the only way to extract a small price increase from the insurers, providers, and pharmacies that are paying for the drugs.
Others suggest that some of the companies are trying to make as big of a profit off newly acquired drugs because they anticipate a political and regulatory clampdown in Washington.
Either way, when the cost of medicine rises faster than wages, it represents real trouble for policymakers.
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