DRUG PRICES ON THE RISE
By Todd Horwitz
Drug Prices Continue to Climb
Pharmaceutical companies started 2020 by raising the prices of hundreds of drugs an average of 5.8%, according to a new analysis, a smaller increase than a year prior as the industry faces growing scrutiny from patients, lawmakers and health plans.
Pfizer Inc. led the way, including increasing prices by over 9% on more than 40 products. The drug industry traditionally sets prices for its therapies at the start of the year and again in the middle of the year. More than 60 drugmakers raised prices in the U.S. on Wednesday, according to an analysis from Rx Savings Solutions, which sells software to help employers and health plans choose the least-expensive medicines. The average increase was 5.8%, according to the analysis, including increases on different doses for the same drug.
The US, which leaves drug pricing to market competition, has higher prices than other countries where governments directly or indirectly control the costs, making the States the world’s most lucrative market for manufacturers. Drugmakers often negotiate rebates on their list prices in exchange for favorable treatment from healthcare payers.
As a result, health insurers and patients rarely pay the full list price of a drug.
Gov. Andrew Cuomo last month proposed allowing prescription drugs to be imported from Canada, a move Trump’s Food and Drug Administration also supports. In response to recent increases, a spokeswoman for the Department of Health and Human Services said, “The Trump administration remains steadfastly focused on lowering drug prices.”
Patients for Affordable Drugs, an organization that advocates for policies that lower drug prices, criticized this week’s increases. “These companies have no self-control, and patients will continue to suffer as a result, until Congress acts,” said Juliana Keeping, a spokeswoman for the group, which has received funding from entities linked to billionaire John Arnold, who has been critical of high drug prices.
Republicans and Democrats in Congress have drawn up proposals for lowering drug costs, while the Trump administration recently introduced a plan for importing drugs from Canada. “Prices go up, but demand remains the same,” said Michael Rea, CEO of Rx Savings Solutions. Clients of the Overland Park, Kan., company include Target Corp. and Quest Diagnostics Inc. “Without the appropriate checks and balances in place, this is a runaway train. Consumers, employers and health plans ultimately pay the very steep price.”
Todd “Bubba” Horwitz