But Ms. Arnold, Professor Schondelmeyer and a 2007 Congressional study of Medicare said the rebates often accrue to the middlemen, not consumers, and higher manufacturer prices lead to higher retail prices.
And the drug industry’s own major consulting firm, IMS Health
, has also reported a significant run-up in prices. Back in April, IMS predicted
that United States drug sales might actually decline this year.
, president of the industry’s trade association, highlighted the gloomy prediction in a June 1 letter to President Obama
shortly before striking the deal to cut drug costs by $80 billion. In negotiating the deal, the drug makers argued that they could not afford to give up more than that.
But in October, IMS made an unusual change
in the middle of its forecasting cycle, saying it now believed United States sales would grow at least 4.5 percent in 2009 — or $21 billion more than expected six months earlier.
A major reason, IMS said, was higher-than-expected price increases for drugs in the United States.