The New York Times had two interesting reports this week on the pharmaceutical industry.

Monday Duff Wilson reported that drug makers have raised the prices of wholesale brand-name prescription drugs by more than 9 percent during the  the last year (more than twice the general inflation rate of 3.8 percent).

The paper reported that this dramatic price increase will boost the U.S. prescription drug tab by more than $10 billion this year. Total pharmaceutical spending is expected to trump $300 billion (up from $230 billion in 2003), and at least one analysis indicates that this will mark the highest annual rate of inflation for drug prices since 1992.

Remember, this is despite the pharmaceutical industry's pledge to reduce the nation's drug costs by $80 billion over 10 years after health care reform kicks in.

Huh?

"Price adjustments for our products have no connection to health care reform," said Ron Rogers, a spokesman for Merck. The drug makers say that several patent expiration dates are right around the corner and that they need to maintain high profit margins to invest in research and development. 

Critics charge the pharmaceutical industry with bluffing. Catherine J. Arnold, a drug industry analyst at Credit Suisse and Steven W. Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota, both argue that the price increases have more to do with health reform than the pharmaceutical industry cares to admit.

"If you're going to take price increases, here and now might be the place to do that, because the next year and the year after might be tough," Ms. Arnold explained.

The New York Times reports:

A Harvard health economist, Joseph P. Newhouse, said he found a similar pattern of unusual price increases after Congress added drug benefits to Medicare a few years ago, giving tens of millions of older Americans federally subsidized drug insurance. Just as the program was taking effect in 2006, the drug industry raised prices by the widest margin in a half-dozen years.

Consider this: The drug industry's consulting firm, IMS Health, predicted in April that U.S. drug sales would actually decrease in 2009 for the first time in 25 years. But, in October, IMS modified this prediction and instead reported that U.S. drug sales would grow by 4.5 to 5.5 percent in 2009. The newspaper said this was largely due to "higher-than-expected price increases."

And on Sunday, Robert Pear reported that "in the official record of the historic House debate on overhauling health care, the speeches of many lawmakers echo with similarities ... statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world's largest biotechnology companies." Pear reports that 22 Republicans and 20 Democrats included the lobbyists' message in their Congressional Record statement. 

The Times explains that the statements were not meant to influence the wording of the House bill per say but to "show bipartisan support for certain positions, even though the vote on passage generally followed party lines."

For example, both Rep. Blaine Luetkemeyer (R-MO) and Rep. Joe Wilson (R-SC), in separate statements, said, "One of the reasons I have long supported the U.S. biotechnology industry is that it is a homegrown success story that has been an engine of job creation in this country. Unfortunately, many of the largest companies that would seek to enter the biosimilar market have made their money by outsourcing their research to foreign countries like India."

And Rep. Robert A. Brady's (D-PA) statement in the Congressional Record reads, "Let me repeat that for some of my friends on the other side of the aisle. This bill will create high-paying, high-quality jobs in health care delivery, technology and research in the United States."

While there may not be a whole lot that Republicans and Democrats can agree on these days, Genentech unearthed some common ground: job creation in a poor economy. And specifically, strengthening the U.S. biosimilar market.