Big Pharma: New Year, New Price Hikes
There seems to be no shortage of breaking news as we kick off 2019, but top of mind for the Coalition for Affordable Prescription Drugs (CAPD) are high drug prices and Big Pharma’s latest shenanigans. And we’re in good company. A recent Politico/Harvard Chan School of Public Health poll showed that Americans overwhelmingly see out-of-control prescription drug prices as a top priority for both the new Congress and the Administration.
But it appears that big drug companies see 2019 as an opportunity for more of the same, and the latest wave of new price hikes have begun. By Wednesday (just the second day of the year!), Reuters tracked price increases on over 250 prescription drugs, including Humira, which remains the world’s top-selling prescription drug. That increase in Humira’s price came on top of another 9.7% price increase at the start of 2018. In another example, Allergan raised prices on 50 of its drugs, half of which were increases of at least 9.5%.
It’s surprising that after unprecedented attention to the damaging effects of price hikes for patients and employers, retiree plans and government programs, drug companies seem resolved to continue their bad behavior, the worst of which CAPD tracked in its Top 10 list in 2018. But it’s even more shocking that as they do so, drug company executives are trying to convince us that their price increases are really not increases at all.
In some hard-to-follow logic, a spokesperson for Novartis told Reuters in December that its price increases were actually decreases, saying that because of rebates and discounts, “the company expects a net price decrease of nearly 5 percent across the whole U.S. portfolio,” even as it raises its prices on 14 percent of the drugs it sells in the U.S. Similarly, Allergan told CNBC that it “does not expect to realize any net benefit from [its] increases this year because of higher rebates and discounts.”
No benefit? It begs the question — why then raise prices at all?
The truth is simple: Drug companies hike their prices because they can. When they do so, millions of patients pay more at the counter, and PBMs have to negotiate more aggressively to help protect their clients — employers, government programs and retiree plans — and ultimately patients from skyrocketing drug prices.
As Americans, if we want lower drug prices, we need to address the root cause — drug companies setting sky-high prices. In the fierce negotiation process that takes place over drug prices, pharma’s prices are the opening bid, and ultimately help determine what patients, purchasers, and we as a nation pay for our prescription drugs.
We should refuse to accept drug manufacturers’ excuses for high prices. Instead, pharma’s decision to raise prices in the New Year should serve as a reminder that it’s long past time to strengthen competition and lower prescription drug prices for all Americans.
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