Second Opinion: No, Big Pharma Is Not Changing
Right on cue, dozens of pharmaceutical companies rang in the new year by increasing hundreds of drug prices by up to 15 times the rate of inflation – despite the fact that their profits continue to far exceed spending on research and development. In just one week:
- Allergan increased the price of two dozen drugs by nearly 10 percent.
- Purdue Pharma raised the price of its blood thinner eight percent.
- AbbVie increased its $20 billion blockbuster drug Humira by 6.2 percent.
At a time when one in four Americans can’t afford their medications, these price hikes are staggering. Still, analysts naively suggested that because these price increases were slightly lower than past years that the industry was “self-policing” and showing “great restraint” in the face of mounting public scrutiny. Research, however, shows year-over-year increases are a significant driver of high prescription drug costs.
The truth is, Big Pharma continues to put profits over people. Bloombergrecently reported that the pharmaceutical industry was advised “to ride out the political blowback from raising prices if it helps them meet their financial goals.” Here’s how other observers put it:
- Pauses in price hikes are “disingenuous.” As Jim Yoccum, senior vice president at Connecture, explained, “When the promises were made, it was a ‘wink wink, nudge, nudge,’ situation to give the Administration the response it wanted knowing full well that their next scheduled increase was in January.”
- Big Pharma has only offered “temporary appeasement.” Bloomberg columnist Max Nisen writes that the “industry seems to think that temporary appeasement and being slightly better than it was in the past will be enough to save it from increased oversight. But pharma’s conspicuous hurry to get back to its old ways only draws more attention to its unconstrained pricing power and lax self-regulation.”
- More hikes are coming. “Some companies chose to go forward early, but by the end of January, we expect the majority to raise,” warned Bernstein analyst Ronny Gal.
- Drug makers continue to be “tone deaf” to the concerns of the American people. Lowering drug prices is Americans’ number one priorityfor Congress and these January “price increases taken together would suggest Pharma is tone deaf to public concerns,” according to Bernstein analyst Ronny Gal.
Big Pharma has made clear time and time again that they cannot be trusted to look beyond their own bottom line. It’s time for Congress to hold these companies accountable.