Whitehouse Calls for Congressional Investigation Into Price-Gouging and Influence-Peddling by the Pharmaceutical Industry

Whitehouse Calls for Congressional Investigation Into Price-Gouging and Influence-Peddling by the Pharmaceutical Industry

Citing the rising cost of prescription drugs and the new Medicare law's projected $139 billion giveaway to drug companies, Democratic candidate for the U.S. Senate Sheldon Whitehouse today called on Congress to mount a formal investigation into price-gouging and influence-peddling by the pharmaceutical industry in America.

"At a time when many seniors are trying to decide whether to fill a prescription or to buy food for next week, Congress has written a law that purposefully fattens the multi-billion-dollar profit margins of the pharmaceutical industry by preventing Medicare from using its bargaining power to force the drug companies to keep prices low," Whitehouse said.

"I'm calling on Congress to investigate - by calling the CEOs of the drug companies to testify, under oath, just like the tobacco industry did. They owe Americans an explanation for the staggeringly high cost of prescription drugs. And the Republicans in Congress owe us an explanation for how this provision got in the law - and whether the $116 million spent by the pharmaceutical industry on lobbying in 2003 had anything to do with it."

Prices for prescription drugs most commonly used by seniors and Medicare recipients are on the rise, with increases often vastly outpacing the rate of inflation. Meanwhile, the pharmaceutical industry continues to rake in billions in profits, with the top 5 drug companies in the Fortune 500 collecting more than $31 billion in 2004 and paying their CEOs more than $65 million combined.

Congress wrote the Medicare Prescription Drug Improvement and Modernization Act to include a provision that explicitly prohibits the Medicare program from negotiating with drug-makers to get cheaper prices for the prescription drugs covered under the program, as the Veterans Administration does. Statistics reveal that the VA is able to negotiate prices that are as much as 48% lower than the Medicare drug plans - and in just the past few months since the program began, some plans have raised prices for the drugs they offer by substantial margins.

The Center for Public Integrity found that the pharmaceutical and health products industry spent $116 million on lobbying expenses in 2003, the year the bill passed. And a study by two Boston University professors found that the new law will increase drug industry profits by $139 billion over eight years.

"I've been talking to seniors all over Rhode Island, and too many of them don't know how they're going to afford the medications they need, even with this so-called benefit," said Whitehouse. "I've never been afraid to go toe-to-toe with powerful special interests, and I promise that if I'm elected, I'll stand up for Rhode Island seniors - not the pharmaceutical companies and their lobbyists."

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