Lawmakers Should Focus Attention on Brand Name Drug Companies’ Egregious Practices, Recommit to Market-Based Solutions to Lower Drug Prices
On Thursday, May 5, the U.S. Senate Committee on Commerce, Science and Transportation’s Subcommittee on Consumer Protection, Product Safety, and Data Security is set to hold a hearing on “Ensuring Fairness and Transparency in the Market for Prescription Drugs.” Lawmakers on the committee should use the hearing as an opportunity to focus attention on Big Pharma’s egregious pricing practices as the root cause of the crisis of affordability in America — and reestablish momentum behind market-based solutions to hold brand name drug companies accountable.
Pharmaceutical companies are the sole entity responsible for setting and hiking prescription drug list prices — and game the system to extend product exclusivity on their products, undermine competition from more affordable alternatives in the market and keep prescription drug prices high.
Get some of the latest facts on the Big Pharma’s egregious behavior below.
PANDEMIC PRICE HIKES
In January of this year alone, Big Pharma hiked prices on 791 brand name medications, including treatments for serious conditions like cancer and HIV. Big Pharma companies among those hiking prices to start the year included:
This marks the fourth major round of price hikes Big Pharma has launched since the start of the pandemic.
TARGETING CRITICAL CONDITIONS
Big Pharma’s non-stop price hikes on critical medications, including anti-cancer drugs and blood-thinning treatments, impact some of the country’s most vulnerable patients. The root causes of this affordability crisis are the egregious pricing practices of brand name drug companies, including setting sky-high launch prices on new medications being introduced to the market and repeatedly hiking prices on existing treatments.
Prices On 54 Cancer Drugs Increased 40 Percent Over Eight Years: “The affordability problem is worsened by soaring list prices for many specialty drugs used to treat cancer and other serious diseases… For instance, prices for 54 orally administered cancer drugs shot up 40 percent from 2010 to 2018, averaging $167,904 for one year of treatment, according to a 2019 JAMA study. Bristol Myers Squibb, the manufacturer of Clark’s drug, Pomalyst, has raised the price 75 percent since it was approved in 2013, to about $237,000 a year.” (“Seniors Face Crushing Drug Costs as Congress Stalls on Capping Medicare Out-Of-Pockets,” Kaiser Health News, January 4, 2021, Harris Meyer)
List Prices for New Cancer Drugs Rose More Than 50 Percent In Five Years: “It wasn’t all that long ago that a six-figure price on a debut cancer drug was big news. Now, it would be more surprising if an oncology launch didn’t carry a price tag of $100,000 or more—and the high cost of those new rollouts is helping drive cancer treatment costs toward $100 billion annually in the U.S. alone. According to a new IQVIA report, U.S. cancer drug spending climbed to almost $50 billion last year, about twice the $24.8 billion spent in 2012. Along the way, median U.S prices for new therapies climbed above $160,000 last year, more than double the median $79,000 launch price in 2013.” (“Super-Pricey New Cancer Drugs Drive Mega Increases in Treatment Spending,” FiercePharma, May 24, 2018, Eric Sagonowsky)
Every New Cancer Drug Brought To Market In 2017 Cost $100,000 Or More: “Spending on cancer drugs has doubled over the past five years, and little wonder: Every new cancer drug brought to market last year cost $100,000 or more, according to a new report. The average cost of a new drug released in 2017 was $150,000, according to the report from The IQVIA Institute for Human Data Science, formerly IMS Health and Quintiles. Those drug costs are expected to double again by 2022, the report finds. That compares to the average $79,000 cost of new cancer drugs that hit the market in 2013.” (“Cancer Drug Spending Doubled In Last 5 Years, Report Says,” NBC News, May 24, 2018, Maggie Fox)
Prices for Two Blockbuster Blood Thinning Medications More Than Doubled In Ten Years: “In 2011, a new category of anticoagulants entered the market. These novel products were revolutionary for patients because they were less risky and did not require routine lab tests. The first products, Eliquis and Xarelto, were priced at over $200 for a month’s supply — major sticker shock at a time when a month’s supply of warfarin cost less than $10. The sticker shock did not stop there. The prices of both drugs have risen every year, far outpacing the rate of inflation. As of January 2022, the prices of a month’s supply of Eliquis and Xarelto are $529 and $516, respectively.” (“Eliquis and Xarelto: Lockstep Price Hikes and Patent Gaming Exploit Patients and Taxpayers,” Patients for Affordable Drugs, April 5, 2022)
Big Pharma Hiked Prices Faster Than Inflation On 23 Of The Top 25 Most Popular Medicare Part D Drugs: “Among the 25 drugs covered by Medicare Part D with the highest total gross spending, 23 had price increases greater than inflation in 2020. This includes the top 3 drugs by total gross spending in 2020: Eliquis, a blood thinner used by 2.6 million beneficiaries in 2020, with a 5.9% price increase; Revlimid, a treatment for multiple myeloma used by nearly 44,000 beneficiaries in 2020, with a 6.5% price increase; and Xarelto, a blood thinner used by 1.2 million beneficiaries in 2020, with a 4.1% price increase.” (“Prices Increased Faster Than Inflation for Half of all Drugs Covered by Medicare in 2020,” Kaiser Family Foundation, February 25, 2022)
ANTI-COMPETITIVE TACTICS COST TAXPAYERS BIG
Big Pharma’s anti-competitive behavior, including tactics like product hopping and patent-thicketing, delay more affordable alternatives from coming to market and cost patients and our health care system billions of dollars. The American public faces unsustainable costs because of this anti-competitive behavior.
As a recent New York Times editorial pointed out, Big Pharma games the patent system to maximize “market share” and “extend product monopolies for decades.”
PRICE HIKES UNCONNECTED TO CLINICAL IMPROVEMENTS
For far too long Big Pharma has used the excuse that research and development (R&D) costs justify out-of-control prescription drug prices and that solutions to lower prices threaten innovation into new breakthroughs. These tired arguments simply don’t hold up to scrutiny.
Multiple studies have found Big Pharma’s price hikes have little to no connection to the cost of its development or improvements in drugs’ efficacy. In other words, brand name drug companies set launch prices and hike prices to maximize profits — not because there is any connection to innovation.
BIG PHARMA INVESTS BOLDLY IN ADVERTISING AND PROFITS — NOT R&D
In addition, contrary to the industry’s insistence that out-of-control prices support costly investments in R&D, the facts show that brand name drug companies invest more boldly in advertising, profits and overhead than innovation and R&D.
Lawmakers should capitalize on the growing momentum surrounding prescription drug prices and support market-based, bipartisan solutions to deliver on their repeated promises to lower prescription drug prices and hold Big Pharma accountable.
Read more about why Big Pharma’s bogus rhetoric on innovation doesn’t add up HERE.
Read more about how Big Pharma targets critical medications like anti-cancer drugs for price hikes HERE.
Read more about Big Pharma’s patent abuse HERE.
Learn more about market-based solutions to hold Big Pharma accountable HERE.