In their endless, insatiable appetite for maximum profits, several major drug companies have delivered New Year greetings to consumers in the form of price increases for many life-saving medicines designed to treat cancer and HIV. According to consulting firm 3 Axis Advisors, more than 400 prescription drugs will be carrying higher price tags this year – so far.
Among the drug companies raising their prices are:
- Bristol-Meyers Squibb
- Gilead Sciences
One drug company that is bucking this trend is Pfizer, which has cut prices on 36 of its older formulations by nearly 99 percent. It is not precisely known why Pfizer decided to drop its prices but 3 Axis Advisors CEO Antonio Ciaccia speculates that the drugmaker sees “an ability to be competitive in a multi-source marketplace by lowering their list prices.” Ciacca adds, “It is a significant philosophical shift that we found pretty noteworthy.”
If there is any silver lining for patients, it is that most of these price increases are more moderate than they have been in the past, averaging just over 5 percent for the majority of products. Some of the biggest price hikes were on Contempla XR, a treatment for ADHD and narcolepsy (13.2 percent), Desoxyn, a methamphetamine prescribed for weight loss (10 percent), Nucynta, a pain reliever (9.9 percent), and Prilosec (9 percent).
But why the price increases at all? Given that many drug companies have hit patients with triple and quadruple-digit hikes in recent years, aren’t they making enough already?
Big Pharma’s historic psychopathic greed notwithstanding, Ciacca says the extra revenue will be used to increase rebates and discounts to insurance companies, pharmacy benefit managers, and government programs in hopes of encouraging better “formulary placement and favorable drug coverage.” Essentially, this means that drug companies are looking for more leverage to negotiate prices in order to receive preferential treatment for their products.
One reason that the current price hikes are more moderate than in the past is public outrage and increasing pressure from lawmakers. It is expected that rising drug costs will be among the most important issues for voters this year. Last November, Trump, in one of his incessant “tweets,” said, “Hard-working Americans don’t deserve to pay such high prices for the drugs they need. We are fighting DAILY to make sure this HAPPENS.”
Interestingly, Trump appears to be in agreement with a proposal, made by Democratic New York Governor Andrew Cuomo, that would allow the reimportation of prescription drugs from Canada – something that has run into stiff opposition from right-wing members of Congress in the past.
Fixated on capitalist free-market solutions for everything, the U.S. has relied on “market competition” to keep drug prices in check. Obviously, this has not worked so well for Americans, who continue to pay the highest prices in the world for their health care needs. Meanwhile, in countries with public, not-for-profit health care systems in which the government controls drug costs, patients generally do not have to be concerned about choosing between food and medicine.
In the meantime, U.S. patients will simply have to be grateful that the current round of price hikes on their prescription drugs wasn’t even higher – and consider the failures of the current profit-driven system when they head to the polls in November.