Why We Should Not Be Surprised That Drug Prices Have Doubled

On Monday, February 29, the AARP released a study reporting that drug prices for seniors doubled between 2006 and 2013. This news may be surprising to some, but there are many elderly who know the truth and reality of this report.

The AARP report indicated that in 2006, the annual average cost of prescription medications was $5,571. In 2013, this cost doubled to $11,341. This is a ridiculous figure considering many seniors are barely living off of an average of $15,526 in Social Security benefits.

Seniors are not alone. According to the AARP report:

“[D]rugmaker price hikes imposed one or more times a year are making prescription medicines increasingly unaffordable for retirees and many other patients. That’s particularly true for people taking multiple drugs or needing long-term medication for chronic health problems, not to mention the uninsured.”

The increase in drug prices is not only for name brand drugs, but also for generic medications.

Some blame the trend on the increased cost, of at least generic medications, on the reduction of manufacturers who make generic drugs. Apparently, the reduction in manufacturers sharply pushed the drug prices up.

Fingers are also being pointed at pharmaceutical companies who purchased the:

rights to some old off-patent and generic drugs and jacked up their prices many times over.”

This came to world-wide attention last year when Turing Pharmaceutical CEO Martin Shkreli priced gouged Daraprim, a 62-year-old drug that was on the market for $13.50 before he took over, and increased 5,000% to $700 once he came on board.

People should not have been surprised by Shkreli’s price gouging when so many other companies do the exact same thing. His action was just more obvious and obscene, whereas other companies have done it slowly and over time. The report by the AARP, however, shows that these companies are raising prices much more quickly than they used to.

No One Should Be Surprised By This News

This news may be shocking to those of us who are healthy and and not dependent on prescription medications. For those of us who rely on these drugs to cure or alleviate medical problems from diabetes to cancer, the increase in price is not surprising at all.

In a study released on October 28, 2015, the Kaiser Family Foundation found that the cost of prescription drugs remains a very high health care concern. Of those polled, 77% were concerned about the costs of prescription drugs for chronic illnesses, while 64% wanted government intervention with prescription affordability. These numbers were higher than those worried about the effects of the Affordable Care Act.

Even members of the American Medical Association (AMA) are highly concerned about the effects that the cost of prescription drug prices is having on their patients. In a November 17, 2015 news release, the AMA stated that the increased prices in prescription medications results in “compromised and delayed” care, including patients foregoing “necessary treatments” all together because of the high expense of medications.

Why Are Pharmaceutical Companies Making Prescription Drugs So Costly?

The short version: because they can. They are not heavily regulated and can blame it on research and development or the cost of advertising.

The long version: these pharmaceutical companies are multi-billion dollar corporations who only care about the bottom line. They have earned every single one of their dollars because they know that people want and need a cure. The companies also understand that people will pay a lot of money for the drug they need.

A prime example of dramatic prescription drug prices are drugs prescribed to cancer patients. According to the Mayo Clinic:

The average price of cancer drugs for a year is estimated to exceed $100,000.”

According to the New York Times, Johnson & Johnson’s Zytigia will cost cancer patients $5,000 a month. In 2011, the New York Times reported:

Analysts estimate that some of the new drugs, particularly Dendreon’s Provenge and Johnson & Johnson’s Zytiga, could reach annual sales of $1 billion or even much more.”

Just two drugs alone will result in an estimated $1 billion.

As stated, the pharmaceutical companies will allege that this is due to research and development and the cost of advertising. I’m no math genius, but it seems to me that two drugs would not cost over $1 billion to research, develop, and advertise.

What Can We Do To Alleviate Our Pocket Books For The Drugs That We Need?  

It would be easy to say, don’t take prescription drugs, instead seek out alternative care and treatment. But that is not realistic. Instead, people should become proactive and demand government intervention.

With a goal of advocacy for prescription drug price affordability, the AMA has already stepped up and made demands on behalf of their patients. Some of these demands include patent reform, banning direct-to-consumer advertising, and federal regulations to limit anti-competitive behavior. In addition, the AMA hopes to:

monitor pharmaceutical company mergers and acquisitions, as well as the impact of such actions on drug prices.”

The AMA does not want to stifle the pharmaceutical companies and wants to encourage new innovation and treatment options for their patients. At the same time, they want patients to be able to afford the medications that their members prescribe.

The other thing that the AMA should promote and we as patients and consumers should demand, is the end of pharmaceutical companies pimping sales representatives out to hospitals and medical offices for the purpose of pushing their drugs.

Pharmaceutical representatives are typically young and very attractive individuals who market their drugs to health care providers hoping the providers prescribe it to their patients. The goal is to have the patients ask for these very drugs on their next visit. The representatives plea with providers to do this for them in exchange for food, vacations, gifts, and even money.

Though some states and even the federal government have made some efforts on this very unethical practice, their efforts have not been enough. As a result, the AMA should insist their members stop accepting these gifts as a part of their advocacy for prescription affordability.

Don’t Expect Any Change

Even where we make demands on government intervention, we have to face reality that any movement will be slow, if anything is done at all. The reason is that the pharmaceutical companies pay our representatives kickbacks. Unless and until law is created to end corporate gifts to congress members, we will continue to see drug prices continue to dramatically increase.

Featured image by Images Money under a Creative Commons Attribution 2.0 Generic License