NEW YORK — Some of the nation's biggest drug companies are beginning to bend to pressure from Congress over the high prices they charge for their products, industry analysts said Tuesday.
Officials from Bristol-Myers Squibb Co. recently told a group of analysts that the company would seek price increases next year that were smaller than many had been anticipating.
Merck & Co. also reiterated its policy of keeping price increases in line with the rate of inflation.
"I think everyone is going to have to fall into line," said Barbara Ryan, an analyst with Prudential Securities.
Two bills introduced on Capitol Hill last week--one by Sen. David Pryor (D-Ark.) and the other by Rep. Peter Stark (D-Calif.)--would require drug companies with manufacturing plants in Puerto Rico to lose some of their tax breaks if they raise prices by more than the rate of inflation.
Under the law now, companies that manufacture products in Puerto Rico can reduce tax payments based on a percentage of total profits. Pryor estimates that the drug industry makes up 47% of the tax credits given to all industries under that law. An estimated two-thirds of U.S. drug makers have some operations in Puerto Rico.
Pryor is also proposing a special board be established to analyze drug-pricing trends. A recent study by his Senate Committee on Aging said prescription drug prices jumped nearly three times the rate of inflation in the past decade.
But the Pharmaceutical Manufacturers Assn. called the Pryor bill "unwise and discriminatory," saying the proposed legislation unfairly singles out the drug industry.