A bipartisan Senate group on Wednesday shared the findings of a year-long report conducted on the unjustified price hikes of older medications with little to no competition, reports The New York Times.
The Senate Special Committee on Aging conducted a year-long investigation on high drug costs, reviewing millions of pages of documents obtained from four drugmakers: Turing Pharmaceuitcals, Retrophin, Rodelis Therapeutics and Valeant Pharmaceuticals.
Here are four things to know about the report.
1. The committee found some drug companies act more like hedge funds under the influence of "activist investors" who often "pushed and pressured" pharmaceutical executives to increase prices, according to the report.
2. In the report, the senators describe the business plan these companies use to raise costs at the expense of patients, taxpayers and the U.S. healthcare system. To maximize profits, dug companies seek out treatments for a condition that affects a small amount of people and sharply increases its price. Since the drug is a "gold-standard treatment," physicians continue to prescribe the medication. Since the market for the drug is so small, there usually aren't many competitors, allowing the company to exercise "monopoly power over its drug pricing," according to the report.
3. While the committee called out these price hikes and identified issues within the nation's pharmaceutical industry, they warned against federal price setting.
"Our report does not recommend that the government get into the business of setting prices for prescription drugs," said Senator Susan Collins, R- Maine, chairwoman of the aging committee, who led the investigation. "We think that would have a harmful impact on the pipeline of innovative drugs."
4. Instead, the committee offers several suggestions to Congress for preventing these price hikes. One such recommendation entails passing legislation to speed up the review and approval of cheaper generic drugs to boost competition.
To view the full report, along with more detailed information on the committee's suggestions for how to tackle high drug prices, click here.
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