"AS A LIFELONG farmer who raised hogs, cattle and sheep...[I] know when someone's trying to pull the wool over my eyes." So declared Senator Chuck Grassley, a Republican from Iowa, this week after the Senate Finance Committee, which he chairs, ordered top executives from seven global drugs firms to explain why American drug prices are the world's highest. Ron Wyden, the senior Democrat on the committee, denounced the industry's "two-faced scheming and profiteering". Big Pharma has been pilloried for decades but still flourished, not least because it keeps producing life-saving innovations needed by Americans, who are in aggregate getting fatter, older and sicker by the year. Still, the hearing marks a dangerous moment for the industry. Reforms may force big changes to a lucrative business model. Anger is growing over rising drug costs (see chart). Insulin cost less than $200 for a vial 15 years ago but sells for nearly $1,500 today, according to one estimate. Such price spikes have led to bipartisan support in an otherwise rancorous Congress for measures to tame the industry.
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