Has industry bottomed out after year’s public relations disasters?
In January 2016, the Washington Post reported “Drug prices were big news in 2015, thanks in large part to ‘pharma bro’ Martin Shkreli, who drew outrage for hiking the price of a life-saving drug by 5,000 percent. Such eye-popping increases were rare. But plenty of drugs became more expensive during the past year.
Pharmaceutical prices rose more than 10 percent in 2015—well in excess of the U.S. inflation rate—according to an analysis released Monday by Truveris, a health-care data company that tracks drug prices.”
“We’re in our third year of double-digit [increases],” A.J. Loiacono, the firm’s chief innovation officer told the Post, adding that the increases occurred across virtually every drug category. “Double-digit inflation is concerning. I don’t care if it’s for gas or food; it’s rare.”
“Truveris found that over the past year, the price of branded drugs — those still on patent — rose 14.77 percent. Specialty drugs, which often are used to treat complex or rare conditions and tend to carry high price tags, rose 9.21 percent. Even generic drugs, which historically have tended to get cheaper over time, rose 2.93 percent,” the Post reported.
“Nearly every class of drugs experienced an uptick in prices,” Loiacono said, but some conditions saw bigger bumps than others. Drugs that treat the symptoms of menopause rose nearly 34 percent last year. Those that treat gout: 33 percent. Medications for erectile dysfunction: 20 percent.
The Washington Post also reported on how the drug-cost spikes figure into America’s overall healthcare tab. “Last month, the federal government calculated that prescription drug spending hit $297.7 billion in 2014—of the country’s $3 trillion in health spending. That’s a jump of more than 12 percent, the largest annual increase in more than a decade. A new generation of specialized drugs and price increases on existing medications helped to drive that spike, and officials have predicted that annual spending on medications will grow 6.3 percent on average through 2024,” said the daily.
Meanwhile, the pharmaceutical industry has maintained that drug costs represent only a fraction of overall health costs in the country, that groundbreaking treatments such as new drugs for hepatitis C will save money over the long term and that innovative medications take many years —and billions of dollars—to develop, according to the Washington Post. In addition, generic drugs account for nearly 90 percent of all U.S. prescriptions.
Shkreli now faces securities fraud charges and has resigned from the company he was leading when he raised the cost of an antiparasitic drug to $750 from $13.50 per pill. But from the halls of Congress to the presidential campaign trail, the much broader issue of drugs costs in the United States is unlikely to fade in 2016.
“Some drug companies seem to recognize that fact and already are doing their best to remain beneath the radar in the coming year,” according to the Post.
Loiacono told the Post data from the last quarter of 2015 already shows a slowing in the price increases of many drugs. He expects some of that caution to carry over into 2016.
“They are being sensitive to this issue,” he said of manufacturers. “They are aware a lot of people are watching.”