May 8, 2017 - Health

PhRMA might boot members that jack up drug prices

Gilles Mingasson / AP Images for AIDS Healthcare Foundation

PhRMA, the pharmaceutical industry's primary lobbying group, is expected to institute new membership rules designed to force out smaller companies that don't invest in drug research, per Bloomberg.

The new rules: In order to remain a part of PhRMA, drug companies will have to spend at least $200 million per year on research over a three-year average. They'll also have to spend at least 10% of their annual global sales on research.

Why it matters: This is PhRMA's way of trying to get rid of smaller companies that mostly buy older drugs and jack up the prices. You might remember the controversy surrounding Marathon Pharmaceutical's choice earlier this year to charge $89,000 for a muscular dystrophy drug that cost less than $2,000 abroad.

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