Dem "Truth Squad": Drug Company Profits Skyrocket $8 billion (27%) After New GOP Medicare Law Takes Effect

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The Democratic "Truth Squad" of progressive House Democrats has released a report showing that pharmaceutical industry profits have skyrocketed since the Republican Medicare drug plan went into effect at the beginning of this year.

The study found that the ten largest drug companies made over $8 billion more in the first half of 2006 than in 2005 - a total increase of 27%. The biggest gainer, Pfizer, gained 73% in sales from last year by raking in more than $6.5 billion through June.

The Truth Squad blamed much of the gouging on the gag imposed by the new law prohibiting Medicare from negotiating for lower prices, a practice used successfully by the Veteran's Administration and in Canada. Other profiteering comes from 6.1 million "dual-eligible" beneficiaries who used to obtain coverage through Medicaid, which drug companies must sell to at their lowest prices, but now must get medication from Medicare, which imposes no such controls.

"The Republican Congress passed a Medicare drug bill that put the interests of the drug companies first and seniors last," said Rep. Henry A. Waxman. "The program is a multi-billion dollar giveaway to the drug companies."

"Clearly, the Medicare prescription drug plan has been very kind to the pharmaceutical industry. Unfortunately, it has not been as kind to America’s seniors," said Rep. Dennis Cardoza.

Click here to read the report (PDF)

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