Another pharma flack to deal with

The steep price increases that constitute a routine part of the pharmaceutical business keep rolling along. Some industry apologists have recently been touting a report by the consulting firm Truveris that found lower price increases for drugs this year compared to 2014. Although they're correct about this year's smaller increases, the overall price hikes for drugs through September 30, 2015 have nonetheless been 9.1 percent.  That's better than the 10.9 percent increase for all of last year, but nothing that deserves boasting.

The situation looks even worse beneath those topline figures because the prices on branded (i.e., patent protected) drugs rose 13.1 percent during the first nine months of this year. Taken in context, these jumps in drug prices compare to overall inflation for 2015 that is less than 1.5%, even as the Consumer Price Index reports a flatline without any increase.

So pharma is justifiably feeling the heat for what they're doing to American consumers and taxpayers. Last week the industry's lobby, the Pharmaceutical Research and Manufacturers Association (PhRMA), admitted they would be meeting to organize a PR campaign against pricing constraints.

That effort seems as if it's already in full swing here in Philly where the Inquirer, for the second time in little more than a month, this week published an op ed piece by a pharma flack who shrieked that price controls on drugs will prevent the development of new compounds that can advance the standards of care.

Right after Labor Day, we wrote a point-by-point refutation of the flimsy arguments that pharma's advocates use to defend the industry's pricing practices. While there is no need to repeat that here, pharma's latest bilge in the Inquirer deserves it own rebuke.

The essence of the pharma jackal's claim is that, "price caps cripple innovation and stifle the creation of new cures" because if pharma companies don't receive what he ambiguously terms as "adequate" returns, funds for research and development will dry up. This delicate condition of the poor pharma industry, according to the writer, means government shouldn't even think about requiring companies to reveal their production costs.  And price controls? Perish the thought.

This rubbish that pharma regularly tosses out was debunked by a formal study from Canada's Carleton University that appeared this past July.  Among other things, they examined drug prices among the 31 countries belonging to the Organization for Economic Cooperation and Development (OECD). Most importantly, they concluded that there is no connection between higher pricing on drugs in a country and the amount of drug research there. If anything, they believe that price controls would lead pharma companies to develop and launch more groundbreaking drugs.

They argue that in the U.S. now, where the health system permits pharma companies free reign on pricing, "80% of new patented drugs" provide no significant benefits "compared with existing alternatives." Since drug companies can charge whatever they want for such me-too products, they have an incentive to "develop non-innovative and less risky 'me-too' drugs instead of new, innovative medicines for unmet needs."

Instead of investing funds in the inherently high-risk R&D process, uncontrolled pricing and patent protection encourage pharma companies to put money into marketing, buying someone else's products, and buying other companies. So the fact that the U.S. pays more than twice the average price of all other OECD countries for the same drugs does not lead to increased investment in research.

Any industry lobby will regularly churn out distortions intended to appease and fool the public. There's no surprise there. The question at hand, however, is for Messrs. Jackson, Gohlke and Ferris who run the Inquirer's editorial board.

Why do they refuse to treat this swill from pharma with the scorn that it deserves as they continue to give the industry's publicity agents free space? Do they fail to see that pharma's attempts to justify the world's highest drug prices are garbage? Are the paper's editors trying to emulate the boosters and Babbitts from Chattanooga, Tennessee who have rushed to support Volkswagen's fraud because the company provides local jobs?

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