High Price of Drugs

November 25, 1959

Report Outline
Charges of Price-Fixing in Drug Industry
Price-Boosting Features of the Industry
Plans to Ease Burden of High Drug Prices

Charges of Price-Fixing in Drug Industry

Resentment at having to pay the high prices charged for many of the medicines now prescribed for minor as well as serious ailments has assured wide public interest for any action that holds some promise of easing this part of the burden of illness. The Senate Judiciary Committee's Antitrust and Monopoly Subcommittee, headed by Sen. Estes Kefauver (D Tenn.), will explore pricing practices of drug manufacturers at hearings opening on Dec. 7. The Federal Trade Commission more than a year ago leveled formal charges of illegal price-fixing against six large pharmaceutical houses. Meanwhile, producers of the Salk polio vaccine are being tried on charges of conspiring to set uniform prices for the vaccine.

Concern over drug prices has grown with proliferation of the “wonder drugs” on which practicing physicians have come increasingly to rely as specific remedies for particular diseases. More often than not, the remedy prescribed today is a patented, trade-name product which the pharmacist takes from a bottle on the shelf rather than compounds himself. The patient has no choice but to pay the price charged or go without medication. The price paid usually is high, sometimes higher than the doctor's fee. Whether the high price is justified, on one hand by the costs of drug research and on the other by the supposedly superior curative powers of the medicine, or whether it is artificially maintained for profit-making purposes is the question.

Senate Committee Probe of Pricing Practices

The Antitrust and Monopoly Subcommittee has sub-penned records of leading drug companies and plans to call their top officials to the stand. The first week of the investigation will be devoted to consideration of prices of cortisone derivatives and will include testimony by the presidents of three drug houses that put out those products. Among prospective critical witnesses to appear during the course of the inquiry is John Lear, science editor of the Saturday Review and author of four recent articles in that publication which dealt with the influence of the drug industry on medical practice. The subcommittee will look closely into the industry's methods of doing business and weigh their effects on prices of seven major categories of drugs: antibiotics, specifics for diabetes, hormone products, sulfa drugs, tranquilizers, vaccines, and vitamins.

ISSUE TRACKER for Related Reports
May 20, 2016  Prescription Drug Costs
Oct. 11, 2013  Regulating Pharmaceuticals
Oct. 09, 2009  Medication Abuse
Mar. 11, 2005  Drug Safety
Jun. 06, 2003  Drug Company Ethics
Sep. 03, 1999  Drugmakers Under Siege
Jul. 17, 1992  Prescription Drug Prices
Nov. 25, 1959  High Price of Drugs