Here’s Why Pharmaceutical Companies Raise Their Prices So Much

Forbes 2 weeks ago
Dollar packs in the capsule, pill. Healthcare costs or financial
Dollar packs in the capsule, pill. Healthcare costs or financial aid concept. 3d

Yes, I’ve ranted about healthcare prices before. On more than one occasion. But I have a new rant for you.

  • It’s not about the high price of new drugs
  • It’s not about a couple pharmo-bro CEOs hiking prices of generic medications by 4 or 5,000%

It’s about brand name drugs already on the market, that, instead of getting less expensive over time (due to increased competition, say, or increasing efficacy of production) get more expensive.

A team out of the University of Pittsburgh tracked the costs of drugs between 2008 and 2016, and discovered some truly disturbing trends. For example, the cost of oral medication rose almost 10% per year over that time, with most of that increase resulting from drugs already on the market. A drug priced at, say, $300 a month this year will be $330 a month next year. They also discovered that the price of injectable drugs rose about 15% per year, compared to an inflation rate of about 2 or 3%. Almost all of those price increases were for medications already on the market.

Here's a table with of their findings:

NOTES The table shows averages across 2008–16. Existing and new drugs are explained in the text.
Authors’ analysis of pricing data from First Databank and pharmacy claims from UPMC Health Plan for ... [+] 2005–16.

Why such huge price hikes? Because no one is stopping pharmaceutical companies from engaging in such practices. Medicare won’t negotiate prices. Private insurers are happy, in the long run, about high healthcare expenses, because they can hike premiums and still get a 4% margin on top of their spending. In fact, insurance companies thrive with high healthcare prices—it’s better to make 4% margin over a huge amount of healthcare expenditure over a small amount.

As I argue in my book, Sick to Debt, we need Medicare to aggressively negotiate drug prices. We need employers and private insurers to demand better prices for medication. We should not tolerate having our medications subjected to runaway inflation.


Source link
Read also:
Business Insider › Politics › 2 months ago
President Trump on Thursday claimed, without citing evidence, that pharmaceutical companies were behind a push by House Democrats to impeach him. "Lowering the cost of prescription drugs, taking on the pharmaceutical companies, you think that's easy...
Business Insider › Politics › 2 months ago
Former Vice President and Democratic presidential contender Joe Biden privately praised pharmaceutical companies, despite publicly supporting initiatives to cut drug prices. Bloomberg reported that Biden told a gathering of donors at the Dallas home of...
CNN › Politics › 1 month ago
South Bend, Indiana, Mayor Pete Buttigieg released a plan early Monday morning aimed at reducing prescription drug costs and jump starting pharmaceutical innovation.
The Wall Street Journal › Opinions › 1 month ago
This is how socialism works, increase regulations until the private companies have to raise prices, then blame those companies for raising prices as the excuse to take them over or more regulations.
The Wall Street Journal › 1 month ago
Boeing, Teva Pharmaceutical Industries, Walt Disney, PG&E are some of the companies with shares expected to trade actively in Monday’s session.
CNN › Lifestyle › 1 month ago
McKesson Corp., Cardinal Health Inc. and AmerisourceBergen Corp. will pay a combined $215 million immediately, and Teva Pharmaceutical will pay $20 million, officials said.
Mirror Online › Politics › 2 days ago
EXCLUSIVE: American pharmaceutical companies are keen to charge the National Health Service more for life-saving drugs, according to a document written by the US Chamber of Commerce and Coalition of Services Industries
The Hill › Politics › 1 week ago
President Trump is backing off his 2016 campaign pledge to negotiate drug prices for Medicare with pharmaceutical companies, drawing fire from Democrats after months of talks on the issue with Speaker Nancy Pelo...
The Sun › Entertainment › 1 month ago
CHILDREN in Need is back for another year of fundraising for disadvantaged children and young people in the UK. But how much money did the campaign raise in 2018? Here are all the details and the total sum since its inception in 1980. How much did...
New York Post › 1 month ago
A pharmaceutical company has issued a nationwide recall for Xanax after it determined a “foreign substance” in the pills could be damaging to users of the anti-anxiety drug. Mylan Pharmaceuticals said in the recall notice that there could be a...
Sign In

Sign in to follow sources and tags you love, and get personalized stories.

Continue with Google
OR