Big Pharma Already Raising Prices

Big Pharma Already Raising Prices
Big Pharma Already Raising Prices

At his first news conference after winning the election, President Trump struck a chord with many people when he accused the big pharmaceutical companies of “getting away with murder.” He promised to change the way drugs are sold in the US, bringing down prices and the cost of health care. The speech sent pharma share prices into freefall, but it looks like the industry isn’t paying any attention.
One reason why health care in the US is so expensive is that the federal government isn’t allowed to negotiate the prices programs like Medicare pay for drugs. President Trump is a long-time supporter of making health care more affordable, and the easiest way to do that is to make drugs cheaper. Unfortunately, the drug companies don’t want to do that, because it cuts into their hefty profits.

Highlights

  • President Trump made his price-busting speech in January 2017, and many people expected quick action to make drugs cheaper. That’s politically difficult though.
  • Instead, the president tried to use indirect methods to put pressure on drug makers. This included a campaign to “name and shame” (although the agency doesn’t like that term) companies that kept pushing prices up. Last May, the FDA published a list of companies that were blocking the production of cheaper generic drugs.
  • The drug companies are resisting the pressure, though. Most of them increased prices last year, to the annoyance of the administration. Now, ignoring the government’s warnings, they’re doing it again. In the first two days of January, about 60 drug companies pushed their prices even higher.
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  • Drug makers argue that prices need to go up in line with inflation – but right now, inflation is just over two percent. Many drug prices have increased by about ten percent – over four times as high.
  • Some of the increases are even higher than that. Ketamine, a widely used anesthetic, has gone up by 20 percent over last year’s price. Enalaprilat, a high blood pressure remedy, has risen by 30.1 percent. And Zingo, used to numb the skin before taking blood samples, has seen an eye-watering 133.4 percent price hike.
  • These increases affect the list price of drugs, and that’s not the same as what the average person pays at a pharmacy. End-user prices are often reduced by negotiations with insurance companies, for example. The whole process is pretty secretive, though, and President Trump wants drug prices to be more transparent. By openly defying him on prices like this, the drug companies are pushing him towards taking stronger action.