The Obama administration will investigate why generic drug prices are soaring and causing markups of up to 17,000 percent.
The Department of Health and Human Services plans to study the total cost of Medicare and Medicaid programs due to the price increases, according to a letter from lawmakers pressing the issue.
Potential presidential candidate Sen. Bernie Sanders, I-Vt., and Rep. Elijah Cummings, D-Md., asked for the investigation earlier this year.
Generic drugs increased in price from 2013 to 2014, according to an analysis of Centers for Medicare and Medicaid Services data provided by the two lawmakers.
The highest markup was for a 500 mg capsule of the antibiotic tetracycline, which skyrocketed from a nickel per capsule to $8.53 per capsule, a boost of more than 17,000 percent, according to the analysis.
“We’ve got to get to the bottom of these enormous price increases,” Sanders said Tuesday.
In addition to examining prices, the administration will investigate applying a rebate provision in the Social Security Act to generic drugs.
The provision requires brand-name drug makers to issue a rebate to customers if their drug goes past a certain price.
President Obama included in his budget a proposal to allow the government to negotiate with drug companies to get a lower price for Medicare and Medicaid-covered drugs. The practice is used in Europe to drive down prices, but it is for the general public.
