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GERALD J. MOSSINGHOFF, PRESIDENT, PHARMACEUTICAL MANUFACTURERS ASSOCIATION, IN RESPONSE TO CHARGES BY SEN. PRYOR ON INDUSTRY PRICING

 WASHINGTON, Feb. 3 /PRNewswire/ -- Gerald J. Mossinghoff, president, Pharmaceutical Manufacturers Association, issued the following in response to charges by Sen. David Pryor (D-Ark.) on industry pricing:
 In his press statement on Jan. 28, Sen. Pryor said he would release a report today that would identify "those manufacturers who broke their pledges to the American public and Congress" to hold prescription price increases to the rate of inflation. Absolutely nothing in Sen. Pryor's report indicates that any company has broken its pledge. He has questioned the integrity of major U.S. companies in America's most technologically advanced industry, and he has failed to back up his charges.
 Over the relatively recent past, nine major pharmaceutical companies have announced their intentions to hold price increases to the overall rate of inflation. These public announcements have taken difference forms, but in general they represent commitments to hold increases in product line prices to the general rate of inflation in the United States. The product lines of these nine companies amount to about 40 percent of the total brand name prescription drug market in the United States.
 Sen. Pryor's report is a failed attempt to discredit what most would call a commendable voluntary action by manufacturers. In this attempt, Sen. Pryor has distorted or misused the data in at least three ways:
 1. In an attempt to make his case, the senator coins a new definition of "outpatient drug market" that would exclude HMOs and what Sen. Pryor refers to as "other large buyers" in the outpatient market. Even with this strange definition, the report fails to support his charges.
 2. Sen. Pryor's focus on prices of individual products rather than actual prices charged for each firm's complete line is selective manipulation of data and an unfair distortion of what that companies pledged.
 3. The price data on which the senator bases his charges are list -- or "sticker" -- prices, before deducting discounts, rebates or other negotiated reductions. Discounts and rebates reduce what customers actually pay for pharmaceuticals. A striking example of the senator's omissions is the $6.4 billion over five years that the industry is rebating to Medicaid under a 1990 law. Such rebates and discounts must be taken into account in any fair analysis. Sen. Pryor's data do not do this.
 Overall, pharmaceutical price increases have slowed dramatically. According to the U.S. Bureau of Labor Statistics, price increases for prescription drugs last year were the smallest in the past 15 years. Increases in the Consumer Price Index for prescription drugs dropped from 9.4 percent in 1991 to 5.7 percent last year -- a 40 percent drop in a single year.
 The pharmaceutical industry has acknowledged the need for healthcare cost containment and expanded access to health insurance for all Americans. We stand ready to work with policymakers to develop responsible solutions to these needs.
 -0- 2/3/93
 /CONTACT: Jeff Trewhitt of the Pharmaceutical Manufacturers Association, 202-835-3464/


CO: Pharmaceutical Manufacturers Association ST: District of Columbia IN: MTC SU:

DC -- DC024 -- 2557 02/03/93 16:05 EST
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Date:Feb 3, 1993
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