If anything can raise our blood pressure, it’s the rising cost of prescription medicine in America. Pharmaceutical prices are too high across the board, and despite the continued public outcry, the problem just gets worse every year. But who’s really at fault for this health-care quagmire?
Politicians on both sides of the aisle have taken aim at drugmakers, with President Trump lashing out at pharmaceutical giant Pfizer and unnamed others:
Courtesy: @realDonaldTrump, Twitter
… and House Democrats recently engaging in an angry letter-writing campaign:
Courtesy: @LauraLitvan, Twitter
Reportedly, Representative Elijah Cummings, on behalf of the “Committee on Oversight and Reform,” has been sending letters to Amgen, AstraZeneca, Celgene, Eli Lilly, Novartis, and other pharmaceutical giants, demanding answers regarding the cost of drugs for arthritis, cancer, diabetes, cholesterol, and even acid reflux.
With persistent rallying cries, our elected leaders continue to tell their constituencies what they want to hear. “The cost of prescription drugs is too high in our country and prices just keep rising,” says Senator Kamala Harris, while Representative Ro Khanna pleads, “Don’t let Big Pharma claim that innovation is the reason why the cost of prescription drugs continue to rise.”
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Harris and Khanna might actually be on to something, though. The latest data from the OECD state that Americans spend around $1,200 on prescriptions drugs each year, and that’s by far more than any other nation. Drugmakers, in turn, have cited innovation as the driver of the price increases, arguing that new and improved drugs are inevitably going to be more expensive.
A recent study published in the journal Health Affairs, however, disputes the pharmaceutical companies’ claim that innovation is to blame. In fact, the study found that “the rising costs of brand-name drugs were due to existing drug price inflation.”
That’s right: price inflation of drugs already on the market, not the improvement of these drugs or innovation of new drugs. As University of Pittsburgh School of Pharmacy Assistant Professor Inmaculada Hernandez explains, when it comes to brand-name prescription medications, “rising prices were driven by manufacturers increasing prices of medications that are already in the market rather than [by] the entry of new products.”
And these price increases weren’t subtle by any measure. Hernandez’ data revealed that from the years 2008 to 2016, the cost of brand-name oral prescription drugs rose 9% per year, and injectable drug prices increased 15% annually. For a standard of reference, note that the rate of inflation in the United States is approximately 2%.
Some drugmakers are particularly egregious in this regard: Sanofi, for example, made headlines in 2014 when they jacked up the list price of their Lantus brand insulin by a dizzying 49%. And they can’t blame “innovation” for the price hike, as Lantus had already been on the market for over a decade.
So there’s the answer to our probing question: America’s prescription medications are so expensive because drugmakers raise prices at will, and because they get away with it. It’s the ultimate poison pill in a nation where patient rights are, all too often, dead last on the list of priorities.
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