- Black-box negotiation processes” between drugmakers, insurers and the middlemen who haggle behind closed doors over how much money changes hands are hidden from patients.
- Drug companies set the list price of drugs at insanely high levels solely to ensure the highest possible payment by insurers once all the haggling is complete.
- There are markups along the supply chain by wholesalers and retailers, which want as big a piece of the profits.
Prices increased for every brand-name drug of the top 20 most-prescribed brand-name drugs for seniors in the last five years. On average, prices for these drugs increased 12 percent every year for the last five years—approximately ten times higher than the average annual rate of inflation. Twelve out of the 20 most commonly prescribed brand-name drugs for seniors had their prices increased by over 50 percent in the five-year period. Six of the 20 had price increases of over 100 percent. In one case, the weighted average wholesale acquisition cost for a single drug increased by 477 percent over a five-year period. Continue reading
KEY TAKEAWAY: Pharma companies have to use their PR departments to help patients who fall through the cracks of our health care system. It’s part of a strategy to clearly indicate that pharma company’s first obligation is to their patients. Continue reading
KEY TAKEAWAY: The stock price of Eli Lilly dropped suddenly on Tuesday after Sen. Bernie Sanders criticized the rising price of the company’s insulin drug Humalog on Twitter. Drug companies are going to hear a lot more about drug pricing which in turn is going to put pressure on everything pharma does. Continue reading
KEY TAKEAWAY: The idea that pharma should have to “open their books” is shortsighted. Pharma companies, like most companies, are public companies and as much as we don’t like it have shareholders who expect a return on their investment. Continue reading
KEY TAKEAWAY: A report released this week during the largest gathering of biotechnology executives in the world found that pharmaceutical companies are more worried than they were a year ago about their ability to prevail in drug price negotiations. If the M&A frenzy among insurers continues drug companies could find out just how bad a strategy of high drug prices really is. Continue reading
POST SUMMARY: Since 2007, the cost of brand-name medicines has surged, with prices doubling for dozens of established drugs that target everything from multiple sclerosis to cancer, blood pressure and even erections, according to an analysis conducted for Bloomberg News. While the consumer price index rose just 12 percent in the period, one diabetes drug quadrupled in price and another rose by 160 percent, according to the analysis by Los-Angeles based DRX, a provider of comparison software for health plans. Source: Bloomberg. Why are drug prices rising and what can be done about it? Continue reading