A drug price increase of 100,000%

KEY SUMMARY:   [inlinetweet prefix=”” tweeter=”” suffix=””]In 2001, Acthar sold for about $40 a vial. Today: more than $40,000. An increase of 100,000 percent.[/inlinetweet]  60 Minutes added more fuel to the fire and it’s just another reason why the drug industry is headed for a very rude awakening.

[inlinetweet prefix=”” tweeter=”” suffix=””]There’s an absolute opaque system of pricing for drugs in our country.[/inlinetweet] That’s part of the problem.  Mallinckrodt bought the drug and quickly increased the price, but that’s not all.  They also bought the  drug’s competitor and shelved the product to eliminate competition.

The Federal Trade Commission charged the drug manufacturer, Mallinckrodt, with violating antitrust laws in order “to maintain extremely high prices for Acthar” but the fine was just an expense item compared with the money they collected in sales.

To make matters worse a small town outside of Chicago hired Express Scripts to help with drug pricing for their employees, but Express scripts is also the sole PBM for the drug.

Now before you say this is an isolated incident consider this: Evidence for that link has mounted since the Great Recession 10 years ago, when deductibles began to soar: People increasingly deferred medical care, putting off elective surgeries and doctors’ visits. National health care spending slowed as a result.

But a recent study of women with insurance plans that carried deductibles of at least $1,000 underscores the danger to consumers required to shoulder a greater share of those costs.

[inlinetweet prefix=”” tweeter=”” suffix=””]Women who had just learned they had breast cancer were more likely to delay getting care if their deductibles were high, the study showed[/inlinetweet]. A review of several years of medical claims exposed a pattern: Women confronting such immediate expenses put off getting diagnostic imaging and biopsies, postponing treatment

Then there is Gilead.  Gilead priced its first new hepatitis C drug, sofosbuvir, at $1,000 per pill, or $84,000 for a three-month course of treatment. Its first combination pill, Harvoni, cost $94,500.  Keep in mind that Gilead did not invest one dime in R&D in this product.  They bought it from a scientist who was supposedly working for the government at the time.  I’m sure Gilead employees are great at rationalizing the price tag, but hiding from reality has always been a good trait for the drug industry.

As I wrote earlier the bubble that has become our health care system is going to pop and it’s going to be loud.