Political Atmosphere Prompts Scrutiny Of Pharmaceutical Industry

Main Category: Pharma Industry / Biotech Industry
Article Date: 24 Jan 2008 - 12:00 PDT

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With "weak new product pipelines" and "sagging stock values," drug companies are "increasingly relying on the government for revenue," though those prospects could be dim as some congressional lawmakers are "gearing up investigations and hearings that could shed a harsh light" on the industry's business practices, the Wall Street Journal reports. According to the Journal, the Medicare prescription drug benefit "increased the portion of retail prescription drug purchases paid for by government sources to 34% last year, from 28% in 2005."

However, the "growing role" of government in the drug industry's business could make pharmaceutical companies "more vulnerable to shifting political winds," the Journal reports. For instance, the House Energy and Commerce Committee is looking into the marketing of several drugs, including Vytorin, Lipitor, Procrit and Aranesp. In addition to scrutiny on Capitol Hill, many of the presidential candidates -- including the three Democratic front-runners and Sen. John McCain (R-Ariz.) -- support importing less-expensive drugs from Canada, while the Democratic candidates also support allowing Medicare to negotiate drug prices with the industry.

Drug Industry Response
Pharmaceutical Research and Manufacturers of America CEO Billy Tauzin said that "we've got a thick skin," adding that "we can handle" attacks. Tauzin also said that PhRMA has formed a task force to consider overhauls to industry marketing practices. He said, "We think some of the criticisms are valid and we ought to address them" (Wilde Mathews/Johnson, Wall Street Journal, 1/23).

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