By 340B Matters

During the coronavirus era, the pharmaceutical industry is hoping to receive an undeserved pass on high drug prices. But while many people now look to Big Pharma for a vaccine salvation, old habits haven’t changed.

Pharmaceutical manufacturers are attempting to cast themselves as angels with halos for their COVID-19 vaccine development efforts but their horns still lurk underneath. Ever-increasing drug pricing remains their business model. Sixty-six percent of respondents to a new Gallup survey say their prescription medicine costs have risen.

Just look back to January to see the industry doing what it does best. It’s a semi-annual tradition to ring in the new year with automatic price increases. This year those price increases ranged from 6 percent to 29 percent on hundreds of medications. The arrival of the coronavirus caused a few drug manufacturers to reverse course — clearly to avoid bad PR.

The rest are saying true to form. The mid-year bump in prices occurs in July and manufacturers are already at it. Forty-two brand-name drugs have risen by an average of 3.5 percent, according to GoodRx. That’s well ahead of the current US inflation rate of 0.62 percent.

The pandemic has proven a boon to Big Pharma as political attention has shifted in Washington to managing the economic fall-out from the pandemic and finding a vaccine. Several bills to control high drug prices are currently sidelined and few expect Congress to take up the issue this year. Big Pharma minions have also handily undermined legislative efforts to combat price gouging on a future coronavirus vaccine.

It’s a fortunate break for an industry that spent $166 million on Washington lobbying in 2019. Much of that money was paid to fend off bills that would curb high drug prices.

Behind the scenes, drug companies have continued to overcharge hospitals and clinics in the 340B Drug Discount Program. Last year, the federal agency that oversees 340B launched a web-based ceiling price tracker to clarify when manufacturers are taking advantage. The result has been a slew of credits to health providers.

The most recent comes from Purdue Pharma and its subsidiaries Avrio Health and Adlon Therapeutics for sales of three medications dating back to 2017 and 2019. In a related development, Eli Lilly announced it will limit distribution of a certain prescription medication to contract pharmacies by not offering 340B discounts at those locations. This is clearly an exploratory maneuver that bears close scrutiny.

340B offers one of the few existing breaks on continual drug-price increases. Manufacturers that raise prices faster than inflation are required to offer those products for 1 penny to participating health providers.

Even as pharmaceutical companies work to develop a vaccine for COVID-19, America must remain vigilant against the natural tendencies of an industry that spends millions on lobbying and continues to enjoy scores of monopolies in the prescription drug marketplace.


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