What I see happening is that while they can, drug companies are taking in as much as possible before ObamaCare (PPACA) forces them to negotiate and accept lower prices. We should be happy they weren’t given the keys to the kingdom and allowed to join forces with the insurance industry. Then the out-of-control cost trend for the entire health care delivery system in this country could have bankrupted us.
What you see is not a reaction to the PPACA, but a loophole. Most likely it’s there by design, to be taken advantage of until it’s closed. Never mind that thousands of people will die if they can’t afford the drugs; that doesn’t matter if you are the CEO of a drug company.
We can hope this is an unfortunate hiccup on the road to a better world for my children and grandchildren.
By Robert Langreth Apr 30, 2014
Earl Harford, a retired professor, recently bought a month’s worth of the pills he needs to keep his leukemia at bay. The cost: $7,676, or three times more than when he first began taking the pills in 2001. Over the years, he has paid more than $140,000 from his retirement savings to cover his share of the drug’s price.
“People with this condition are being taken advantage of by the pharmaceutical industry,” said Harford, 84, of Tucson, Arizona. “They haven’t improved the drug; they haven’t done anything but keep manufacturing it. How do they justify it?”
As the pharmaceutical industry, led by Pfizer Inc.’s proposed $100 billion takeover of AstraZeneca Plc, is in the throes of the greatest period of consolidation in a decade, one reality remains unchanged: Drug prices keep defying the law of gravity.
Since 2007, the cost of brand-name medicines has surged, with prices doubling for dozens of established drugs that target everything from multiple sclerosis to cancer, blood pressure and even erections, according to an analysis conducted for Bloomberg News. While the consumer price index rose just 12 percent in the period, one diabetes drug quadrupled in price and another rose by 160 percent, according to the analysis by Los-Angeles based DRX, a provider of comparison software for health plans.
Starting prices for new drugs are escalating as well. Today, a cholesterol-lowering treatment for certain rare cases costs $311,000 a year and a cystic fibrosis medicine — developed partly with funding from a charity — costs $300,000 annually. Fifteen cancer drugs introduced in the last five years cost more than $10,000 a month, according to data from Memorial Sloan Kettering Cancer Center.
Analysts, meanwhile, predict the first $1 million drug treatment may be just around the corner.
The recent wave of acquisitions may push prices even higher, suggests Robert Kemp, an economist at the University of Louisiana at Monroe. The more drugs a company has in a specific therapeutic area, he said, the more ability it may have to maintain higher prices when negotiating with payers.