USA's PhRMA refutes NYT story on drug prices

Pharmaceutical Research and Manufacturers of America (PhRMA), the USA drug industry lobby group, has strongly contested the allegations in a front page New York Times story that suggested that drugmakers raised their prices by 9% this year in order to cushion themselves from the steep cuts in drug spending that are included in the country's health reform plans. That will add more than $10 billion to the nation's drug bill, which is on track to exceed $300 billion this year. By at least one analysis, it is the highest annual rate of inflation for drug prices since 1992, the NYT article claimed.

That is not the case, PhRMA senior vice president Ken Johnson said in a statement, quoting Mark Twain's comments about 'lies, damned lies and statistics,' saying that, 'unfortunately, today's New York Times only tells half a story, using selected statistics to make a flawed assumption that an increase in drug prices must somehow be tied to health care reform.'

'In truth, price increases are the natural result of market forces. All companies make their own independent pricing decisions based on many factors, including patent expirations, the economy, and the huge, sunk R&D costs which typically exceed $1 billion for a single medicine.

'But here is a key part of the story that the Times ignored: according to Forbes magazine, 58,000 jobs in our industry have been lost so far this year because of the economy and sluggish sales, due - in large part - to a rapid increase in the use of generics. What's more, financial results for a dozen of our companies show zero revenue growth in the third quarter and -3% year to date. And, one of the same studies cited by the Times forecasts only a 2% revenue growth over the next five years. Of course, that wasn't reported. In fact, revenues generated by our industry help to fund the discovery and development of innovative, life-saving medicines, which benefit patients worldwide and advance medical progress.