Dramatic Rise in Drug Prices Greeted With Silence -- Why?

Robert W. Morrow, MD


September 13, 2012

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We have seen a peculiar phenomenon as the fight heats up over the Affordable Care Act in that the pharmaceutical industry, the most profitable industry in the United States, is sitting it out. Why is that happening? You can say it is because they are going to sell more pills, but why is industry taking this role of supporting what the Chamber of Commerce and a lot of other industries do not like?

In summary, it appears that a deal was forged early on in the politics of healthcare reform to leave pharma alone and let them do what they wish with prices. An organization like the Veterans Administration will negotiate the price of the medications they use. They have a formulary listing how much they will pay for a drug based on the cost of making the drug.

Yet, now we have this ridiculous phenomenon that I have been watching in my practice where the most common drugs have doubled, tripled, or quadrupled in price in the last 3 or 4 years and no one has said anything about it. Why are our professional societies not saying something? Why is the government not saying anything? I first figured this out in some detail when someone mentioned that their drug for erectile dysfunction, sildenafil, had gone from $10 a pill to $24 a pill in the last 2 years, and sure enough, when I looked at all the pills [for erectile dysfunction] they had doubled and tripled in cost. All in lock step, of course, although they are competitors.

Then I started looking at other drugs. We know that albuterol inhalers for asthma have gone up from $10 or $12 an inhaler to the $50s -- $57, $52 (you can look this all up on the price guides that you can get easily with various apps on your phone) -- and that the inhaled corticosteroids, which everyone agrees are the foundation of care for people with moderate and persistent asthma and worse, these have gone up to anywhere from $140 to $220 per inhaler, even without a long-acting beta agonist. Inhalers with long-acting beta agonists have gone from $140 a month to the $240-a-month range. This has been in the last 2 or 3 years.

Take a look at this phenomenon and think about where the money is going. Yes, we will see orphan drugs that now cost $350,000 a year. This was reported a few weeks ago in the New York Times about a new drug. We expect to have a price of $1 million for 3 years [for an orphan drug] because the pharmaceutical company can set the price, even though the drug was invented first with money from an NIH grant or some such.

But the fact that so much of our money is now being transferred to the pharmaceutical industry without a peep from our professional societies, without a word from the government, is deeply troubling to me and I hope it is deeply troubling to you. I would love to hear what you have to say about it.

Thank you. This is Bob Morrow for the Transparent Medical Practice blog.