In a letter sent to the President and CEO of PhRMA, the lawmakers called out drug manufacturers for further driving up inflation by abusing their market power and price-gouging American families.
WASHINGTON, March 4 — Sen. Bernie Sanders (I-Vt.) on Tuesday, along with colleagues in the U.S. Senate and House of Representatives, joined Sen. Elizabeth Warren (D-Mass.) in sending a letter to the CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA) demanding answers over findings from two new analyses that reveal drug manufacturers are using their market power to impose extraordinary price increases on popular prescription drugs.
These troubling, widespread, and rapid price hikes affected the vast majority of popular brand name drugs in January 2022 – particularly those used by seniors and people with disabilities in the Medicare program – and also have the effect of driving up general inflation.
The lawmakers wrote, “The large, across-the-board price increases of popular, brand name prescription drugs appear to be an example of pharmaceutical companies taking advantage of their abusive market power to expand already-large profits. And the coordinated and timely price increases ring of political opportunism. This behavior by drug manufacturers – which will drive up their already-exorbitant profits at the expense of middle-class families in need of medical care – demands an explanation.”
The lawmakers have requested a response from PhRMA’s President and CEO, Stephen J. Ubl, no later than March 8, 2022.
One of the analyses, by the University of Minnesota PRIME Institute, found that drug manufacturers increased prices for 72% of all formulations of the 100 top-selling drugs in January 2022, with a 5.1% average price increase for brand name drug products. A separate analysis, provided by Johns Hopkins University researchers, revealed that manufacturers increased prices for 16 of the top-selling 20 Medicare Part D drugs in January 2022, by an average of 3.9%.
Some drug prices have skyrocketed. For example, manufacturers increased the price of Humira, used to treat autoimmune diseases, by 7.4%. The price of a three-month supply of the cancer drug Revlimid increased by nearly $3,600 in January, and the price of the breast cancer drug Ibrance increased by over $900. The price increases for the top 20 Medicare Part D drugs, if also reflected in total expenditures, would increase costs for consumers and taxpayers by an estimated $2.5 billion.
These price hikes impact the vast majority of popular brand name drugs and hurt consumers dealing with record high prices throughout the economy. The average price increase for all brand name drugs in January 2022 was almost twice as high as overall inflation for medical care services for all of 2021. The average price increase for the 20 top-selling Medicare Part D drugs was almost 1.5 times as high. The price increases hit older Americans and people with disabilities in the Medicare program especially hard.
Sanders has long fought to lower the cost of prescription drugs for millions of Americans and for Medicare to be empowered to negotiate drug prices, just like the Veterans Administration. For the last 30 years, the Veterans Administration (VA) has negotiated prices with the pharmaceutical industry while Medicare has not. The result is that Medicare pays twice as much as the VA for the exact same prescription drugs, according to the Government Accountability Office. Recently, in February of 2022, Sanders joined with Sen. Klobuchar (D-Minn.) to formally call on the U.S. Senate to take up legislation to allow Medicare to pay the same prices for drugs as the VA.
Last year, as Congress considered legislation to lower drug prices, PhRMA and lobbyists for big pharmaceutical companies lobbied against pieces of the legislation aimed at lowering costs for Americans. But when the legislation stalled in December 2021, so did the threat to pharmaceutical manufacturers’ price gouging practices. In this letter to PhRMA’s CEO, the lawmakers slammed drug manufacturers’ almost immediate price hikes at the expense of middle-class families.
The letter was also signed by Sens. Amy Klobuchar (D-Minn.), Tammy Baldwin (D-Wis.), Maggie Hassan (D-N.H.), Tina Smith (D-Minn.), Sheldon Whitehouse (D-R.I.), and Ron Wyden (D-Ore.), and Reps. Katie Porter (D-Calif.), Jan Schakowsky (D-Ill.), Peter DeFazio (D-Ore.), Peter Welch (D-Vt.), and Susan Wild (D-Pa.).