Even as drug makers promise to support Washington’s health care overhaul by shaving $8 billion a year off the nation’s drug costs after the legislation takes effect, the industry has been raising its prices at the fastest rate in years. ...
Drug makers say they have valid business reasons for the price increases. Critics say the industry is trying to establish a higher price base before Congress passes legislation that tries to curb drug spending in coming years.
Both the drug makers and the critics are right, of course: the only difference is that critics do not accept profit maximization as a legitimate goal for the drug makers.
The bigger problem posed by health reform is not just these increases in drug prices; it is the reduced incentive for innovation implied by spending controls going forward.