Significant price cuts announced by Abbott

As one of more than 20 drug companies targeted by the US JusticeDepartment's pricing investigation, Abbott Laboratories has lowered prices on about 50 of its drugs (mostly injectable anesthetics and intravenous products). Many of the prices were lowered slightly or remained the same, reports the Associated Press, but other cuts were significant. For example, the price of a drug kit used by home health workers to clear clogged intravenous tubes was reduced from $127 to $2.39, it notes.

According to a report in the Chicago Tribune, Abbott is the first major pharmaceutical company involved in the federal investigation known to have notified the government of price cuts. However, an Abbott spokeswoman told the newspaper that price changes are routine and the company would not respond to questions as to whether government price investigations were a factor.

Associated Press notes that a September 2000 report by congressional investigators found that Medicare is overcharged by $447 million a year, and that companies report higher prices to the government for reimbursement than they actually charge doctors.