| |  | Industry Rx | In the run-up to the hearing, Sanders and the panel’s Democrats released a report Thursday that showed how several of the manufacturers that made agreements with the Trump administration to lower their prices in the U.S. had, in fact, raised them. Overall, lawmakers found that companies that cut deals introduced new prescription drugs at an average launch price of $353,000 per year. Drugmakers had also increased the cost of hundreds of their existing products — including some while in negotiations with the administration, according to the report. But: The figures in the report are list prices, which doesn’t account for any of the rebates or discounts drugmakers provide to obtain insurance coverage. The net price — what patients see — has been declining over time, according to an analysis from the Drug Channels Institute, an industry research firm. Drugmaker industry group Pharmaceutical Research and Manufacturers of America said that rising list prices in the report reflect the dynamic set by other players in the health care system demanding larger discounts, which drives up overall costs. → Patrick Barham, a spokesperson for Sanders, tells me that the report targets list prices because that is the amount set by drugmakers. “Millions of Americans’ out-of-pocket payments are tied to the list price, and this is the cash price for millions of uninsured Americans,” Barham added. Steve Knievel, an advocate for Public Citizen’s Access to Medicines program, points to a Rand study that found net drug prices in the U.S. are still exponentially higher than other countries. The Democrats’ analysis also takes aim at pharma companies increasingly purchasing their own stock — a move known as a stock buyback that reduces the number of shares available and typically boosts the stock price. Sixteen drugmakers that made deals to lower their prices paid shareholders $97.3 billion in dividends and spent another $34 billion buying back their own stock. All told, they spent nearly 21 percent more on these shareholder payouts in 2025 than the year before. Speaking of list prices: It might also be worth revisiting some potential implications of policies that seek to force drugmakers to lower list prices rather than going after the net price by targeting other industry players. → In 2021, lawmakers removed a limit on the total fees that drugmakers owed to Medicaid if they raised the list price of a medication faster than inflation. When big inflation penalties are in play, a lower list price reduces such penalties. So the potential unintended consequence is that discounts shrink and the net price rises. In a recent regulatory filing, Merck disclosed that it had decreased the list prices of its blockbuster Januvia diabetes treatments to move them closer to net prices earlier this year. → That’s because the new policy removing the rebate cap meant that the company was “paying state Medicaid programs more in rebates than it received on Medicaid sales” for those products in 2024, Merck said. However: “The lower list price has reduced the rebate amount Merck pays to Medicaid, resulting in higher realized net pricing,” the company said in the filing. This essentially means that the policy designed to squeeze drug companies has backfired, wrote Adam J. Fein, the president of Drug Channels Institute, who spotted the filing. In some cases, government programs are now paying more for medications than they otherwise would. | 
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