Boom! How about another round of price increases from big pharma to kick off your holiday weekend? Can’t say we didn’t see this coming, as explosive price hikes have become customary in Januaryand July.
Still, after months of mounting pressure from the President and Congress, including multiple congressional hearings, not to mention public outrage and plenty of negative press, you would think drug companies might not be so blatant this year.
Several big manufacturers have indeed tried to avoid the January 1/July 1 scrutiny by staggering several smaller price increases over the proceeding months. We expect to see those soon, if the first six months of 2019 were any indication.
So far this year, more than 3,400 drugs have increased in price, a 17% increase compared with the roughly 2,900 drug price increases at the same time in 2018, according to fresh analysis by the Rx Savings Solutions data team. We found the average price hike for those 3,400 drugs stands at 10.5%, or about five times the rate of inflation. About 40 drugs have risen in price by more than 100%.
(Our pricing data and analysis, as well as our CEO Michael Rea, have been featured in national news coverage at least a dozen times in recent days.)
Despite a lack of any real therapy innovations, pharmaceutical companies determine that their drugs are worth significantly more money every year. In America, we celebrate our free-market system, where the economics of supply and demand rule, and consumers benefit from competition, innovation and information. Very little of that applies to the world of prescription drugs.
In this inelastic drug market, demand stays fairly constant, only people’s lives are at stake and consumers are forced to pay any price. Especially when they’re uninformed of their choices and costs.
What will stop this runaway train? There are some good ideas coming out of Washington, but time will tell if any make it through a gauntlet of pharma lobbyists and actually become policy. And, really, have any regulations on any industry helped to lower the prices consumers pay?
It wasn’t regulation that fundamentally changed the video-rental business, the transportation business, the lodging industry or the world of retail. The right technology, innovation and information in consumers’ hands did that.
The only thing that will truly fix our drug cost problem is an educated, informed market where people understand therapy options and corresponding costs to treat their medical conditions. It’s simple, but not easy. We’re getting there one member at a time.