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November 20th, 2009
Grijalva Announces Support For Congressional Investigation Of Anti-Consumer Drug Pricing Irregularities

Washington, DC – Rep. Raúl M. Grijalva today announced his full support for a Congressional investigation of unusual drug company pricing behavior over the past several years. Grijalva, co-chair of the 83-member Congressional Progressive Caucus, said the Government Accountability Office (GAO) should look carefully at why pharmaceutical companies have raised prices on dozens of common prescription drugs far in excess of standard inflation.

House Energy and Commerce Committee Chairman Henry Waxman and Ways and Means Committee Chairman Charles Rangel, among other lawmakers, sent a letter to the GAO on Wednesday requesting “ongoing monitoring of pharmaceutical manufacturer drug prices” and an inquiry into “recent trends in prescription drug pricing,” both of which Grijalva said are necessary to protect consumers from unfair and potentially predatory price changes. The call for an investigation is supported by the AARP, which found in a recent study that “average manufacturer price increases for brand name and specialty prescription drugs widely used by Medicare beneficiaries continued to far outstrip the price increases for other consumer goods and services” over the past year.

“In contrast,” the report noted, “average manufacturer prices for widely used generic drugs fell during the same time period.”

Grijalva noted in announcing his support that prices for brand-name drugs have risen 9.3 percent since October 2008 despite a reduction in inflation economy-wide.

“Drug companies should no longer be able to treat sick, retired and economically insecure Americans as hostages,” Grijalva said. “Raising prices over and over, without explanation, is an unjustifiable abuse of their role as health care providers. If these companies fear that health care reform will cut into their overinflated profits, they should look to their own behavior as a reason why reform is necessary.”

The impact of repeated drug price increases is not confined to people who take several medications, Grijalva said. The AARP report found that for a person taking “only one specialty medication on a chronic basis, the
average increase in the cost of therapy rose by almost $3,509” over the past year, “compared with nearly $3,254 in 2008.”

“In this economic climate, to continue hiking prices on people who literally depend on these medicines to stay alive is unconscionable,” Grijalva said. “Anyone paying attention should ask him- or herself what it would mean over the next two years to spend an additional six or seven thousand dollars on drugs that cost the manufacturer nothing extra to produce.”

Pharmaceutical industry claims that stopping or reversing the price increases would cost the economy jobs are “cynical and misleading,” Grijalva said.

“Comprehensive health reform should end the cycle of legalized theft that drug companies have perpetuated for so long,” he said. “An economy that allows corporations to treat even the neediest consumers as disposable sources of revenue, to live or die based only on how much money they have, cannot last.”

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