Runaway drug prices

GP-costs-savings-620x400POST SUMMARY: New polling finds public is concerned about the rising cost of prescription drugs.  Pharma has found a away to keep investors happy with more drugs coming off patent, but is this model sustainable?

Hillary Clinton is signaling in public comments that prescription-drug affordability will be a priority in her coming campaign. “We need to drive a harder bargain negotiating with drug companies about the costs of drugs,” she said in Iowa last week, per MSNBC. A Kaiser Family Foundation poll asked what the next health care priority should be for the White House and Congress as Obamacare settles into its fifth year, 76 percent of Americans said “making sure that high-cost drugs for chronic conditions are affordable to those who need them.” And 60 percent, including a slim majority of Republicans, said they support government action to lower prescription-drug prices.


t the same time, prescription-drug prices are spiking. In November, the Chicago Tribune reported that the average price for the 50 most popular generic drugs had increased 373 percent from 2010 to 2014, from $13.14 to $62.10. A May 2014 Bloomberg report tracked similar trends: One diabetes drug’s price increased 160 percent from 2007 to 2014, while the overall consumer price index went up by just 12 percent. (The drug industry has contended that high out-of-pocket costs resulting from insurance plan designs are to blame for the pinch Americans are feeling.)

Specialty Drug Prices Increasing

The prices of multiple sclerosis drugs have skyrocketed in the past two decades, in some cases rising more than 700 percent, a new study shows. The huge price increases have occurred even though newer drugs have been introduced, something that normally stabilizes or lowers the cost of older drugs, Oregon State University researchers noted.

Currently, there are no MS drugs in the United States with a list price below $50,000 a year, which is two to three times higher than in Australia, Canada or the United Kingdom. The cost of MS drugs in the United States is rising five to seven times faster than the normal rate of drug inflation, according to the study published April 24 in the journal Neurology.


And it’s not just MS drugs. Sticker shock is alive and well when it comes to medical treatments for rheumatoid arthritis (RA). Biologics are a common treatment for RA patients — but not a cheap one. On average, patients with rheumatoid arthritis can expect to pay $2,700 or more annually in copayments for biologic drugs.

Some of the treatments cost more than $10,000 and many of these patients do not work and receive Social Security disability benefits.

Who is the customer? Wall Street or Patients?

Biogen reported on Friday that sales and earnings in the first period jumped by 20% and 72%, year over year, respectively. The stock slumped 6% on Friday. So what’s not to like? Sales of Biogen’s best-selling multiple-sclerosis drug, Tecfidera, slowed to $825 million from $916 million in the fourth quarter.

The problem is that Wall Street’s expectations for Tecfidera are huge already. Analysts forecast $4.1 billion in sales this year, rising to nearly $7 billion in 2019, according to FactSet. With growth targets like that to attain, Biogen has no time to look back and it’s only a matter of time before price increases start to be implemented.


Make no mistake about it drug pricing is out of control and the American public is sick and tired of reading about high drug prices.  This is a spotlight that pharma created themselves and now that the light is on them, it’s going to be hard to dim the outrage.