Drugmakers are starting 2019 with a slew of price hikes, affecting more than 1,000 medications.
The average increase amounts to about 6 percent, said Michael Rea, founder and CEO of RX Savings Solutions, which sells software that helps employers and health plans analyze drug prices. Among the best-known drugs getting costlier are the opioid OxyContin, with a 9.5 percent jump, and the blood thinner Predaxa, up 8 percent.
Those increases underscore the challenges facing consumers and health care plans as drug costs far outpace the rate of inflation or wage growth. Americans spent $535 billion on prescription drugs last year, an increase of 50 percent since 2010, according to one estimate.
“A 9 percent increase isn’t just over inflation — it’s four times inflation,” Rea noted. “No matter what, that effect is felt by consumers, by payers and the solvency of public and private health plans.”
Inflation around the U.S. remains around 2 percent.
Purdue Pharmaceuticals, the manufacturer of OxyContin, and Boehringer Ingelheim Pharmaceuticals, the maker of Predaxa, didn’t immediately return requests for comment. Drug companies say they must raise prices to fund development of new medicines.
Other drugs seeing higher prices this year, according to RX: pain-relief med Subsys, made by Insys, up 9.5 percent, and Tecfidera, a psoriasis medication made by Biogen whose cost is rising 6 percent.
Paying more for the same?
Consumers don’t typically pay a drug’s list price because discounts and insurance often cut the final cost. In some cases, however, people are paying more even though the medication has had no significant change. That was the case with Turing Pharmaceuticals, whose CEO, Martin Shkreli, in 2015 became the poster boy for excessive drug price hikes after he engineered a 5,000 percent price increase for the life-saving medication Daraprim.
Insulin is one vital drug that has drawn attention from lawmakers and diabetics, some of whom report cutting back on the medication after prices more than tripled from 2002 to 2013. Since then, insulin prices have continued to climb — costs for the drug from two manufacturers rose almost 8 percent in 2017.
That may shock some consumers, given that insulin is a nearly 100-year-old medication whose inventors sold the patent for about $3 to get the drug to as many diabetics as possible. But drugmakers have made small tweaks to their insulin products, allowing them to maintain their patents for years.
One diabetes drug whose price has shot up lately is Metformin, which treats high blood sugar. Its manufacturer, Granules Pharmaceutical, in December jacked up the price 148 percent, Rea said. Granules didn’t immediately return a request for comment.
President Donald Trump has vowed to reduce drug prices, making it a key part of his election campaign, and last year accused drugmakers of “getting away with murder.”
So far, there’s little evidence his administration’s efforts are slowing the steady increase in drug prices. Earlier this year, Pfizer raised the price on some of its well-known medications, including the erectile dysfunction drug Viagra.
“I think the ideas are great, and I commend anybody who is fighting the fight with this,” Rea said. “It’s like you have the Hoover Dam and it has 50 holes in it, and you take a stick of bubble gum and put it in one hole. If you’re effective, the water will still rush out of the other 49 holes.”