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 Pradaxa, 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 oneĀ estimate.Ā
“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, didn’t immediately return requests for comment.Ā
Boehringer Ingelheim Pharmaceuticals, the maker of Pradaxa, said its goal “is for no patients to be denied access to our medicines because of cost.” The company offers programs for patients who can’t afford medications, like co-pay assistance, a representative for the firm noted in an email.
“Taking price increases does not directly translate to increased profits for our company,” it added. “Most of the increases on our list price, or wholesale acquisition costĀ is lost through a competitive rebating and contracting process with insurers, pharmacy benefit managers and the government, among others.”
Drug companies say they must raise prices to fund development of new medicines. PhRMA, the pharmacy industry’s trade group, said the analysis was “flawed and inaccurate,” failing to account for the rebates and discounts provided to insurers.Ā
“The data focus on a selective sample of companies and medicines and ignores how the competitive market works to control costs,” it said in an emailed statement. “Due to negotiations in the market, retail medicine costs grew just 0.4 percent in 2017, the slowest rate since 2012, and net prices for brand medicines grew just 1.9 percent.”Ā
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.
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.
Insulin is one vital drug that has drawn attention from lawmakers and diabetics, some of whom report almost 8 percent in 2017.Āafter prices more than tripled from 2002 to 2013. Since then, insulin prices have continued to climb — costs for the drug from two manufacturers roseĀ
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