SUMMARY: Happy new year! Here’s a 4-6% price increase on your prescription drug. Prescription drug prices are sure to be on the political talking points as drug makers indicate that they don’t care or know that they have drug CEOs in their pockets.
Drugmakers including Pfizer Inc, GlaxoSmithKline PLC, and Sanofi SA are planning to hike US list prices on more than 200 drugs in the United States on Wednesday, according to drugmakers and data analyzed by healthcare research firm 3 Axis Advisors.
While all the price increases are below 10% the media is going to ensure that voters know about these price increases for an industry whose profits are among the highest in ANY industry.
One can foresee that there is going to be a major push for Medicare to negotiate drug prices with drug companies. It’s going to happen, it’s only a matter of when even with donations flowing to Republican candidates.
Top executives from five pharmaceutical companies including Pfizer Inc. and Amgen Inc. have given more than $370,000 combined to 2020 political campaigns. The contributions flowed largely to Republicans who pose a bulwark against drug price-control legislation that could hurt companies’ revenue.
In addition, the drug industry lobbying group PhRMA registered $460 million of revenue in 2018, a shade more than 2017, according to its latest tax returns obtained by the Center for Responsive Politics. Where is the money going? Hundreds of millions of dollars were funneled to law firms, advertising agencies, patient groups, political campaigns, think tanks, astroturf organizations and executive pay.
Pharma CEOs are under pressure from Wall Street. They are being evaluated by investors on their ability to produce immediate financial value, almost always in the form of value-extraction activities such as cost-cutting, price increases, share buybacks or other forms of financial engineering. This behavior is at least partly to blame for the unethical business practices that have dominated recent news.
Will most patients see a price increase on their prescriptions? That is hard to say. Our healthcare system’s complexity is great at hiding who gets the money and how much. However, one only has to look at the profits and stock price of PBM’s, insurers and pharma companies to see who is making out like a bandit while over one-quarter of patients ration drugs because they can’t afford them.
There is enough blame to go around but until politicians are willing to tackle the system nothing is going to change.