Prescription drug prices are out of control

If you’re one of the 3-in-5 Americans who take prescription drugs, your pocketbook may be getting crushed as a result. In the U.S., we now spend over $309 billion on prescription drugs every single year. That’s a rise of over 38% in just the last two years! This staggering price increase isn’t because people are using more meds, though. It’s because pharmaceutical companies can get away with charging more. And hospitals, doctors and patients who need the medicine have little choice except to pay up.
Both generic and branded drug prices are increasing as well, eliminating once-more-affordable alternatives. And the most-expensive drugs aren’t necessarily new and innovative miracle cures. In fact, many are commonly used and have been on the market for decades. For Americans, prescription drugs are becoming one of the biggest financial burdens we face. Especially for retirees who could never have predicted or planned for this. You really only have two options when a medicine you take increases in price:
1. Make monetary sacrifices elsewhere to afford the new rate, or 2. Stop taking the drugs altogether and face the consequences.
For most people, option two isn’t even an option. If you’ve been reading my Afternoon Editions for any length of time, you know that I am a fan of free markets, free minds and the free choice of individuals to do what they want with their hard-earned money. That also means having a healthy dose of skepticism when it comes to government solutions that come in the forms of more laws and regulations. Especially when the biggest beneficiaries aren’t the citizens themselves … Consider that Big Pharma has spent $3.4 billion in federal lobbying since 1998 — more than any other industry — to get lawmakers on the payroll and make sure no one gets in their way.
One of the most-famous cases of pharmaceutical price-gouging came in late 2015. That was when Martin Shkreli, now-former CEO of Turing Pharmaceuticals, raised the price of the drug Daraprim by 5,000%. Although price hikes like this have happened before, Shkreli instantly became public enemy No. 1 for his complete lack of empathy toward consumers. Unapologetic to this day, the former CEO doubled down on his decision by saying, “I would have raised prices even higher.” Related story: A Smirk of Defiance, or Just Dumb Hubris? Daraprim is used to treat a rare condition known as toxoplasmosis. It is only prescribed to around 2,000 patients in the U.S. For as notorious as Shkreli has become, not that many people use Daraprim and thus were mostly affected by the increase. Then there is pharmaceutical supplier Mylan, which took the price-hiking practice much further when it raised the prices of its popular allergen injection, the EpiPen. Mylan acquired the decades-old product in 2007 when pharmacies paid less than $100 for a two-pen set. Since then, the company has been steadily raising the price of this life-saving device. Related story: Price-gouging; the Senator’s Daughter; Cover from Washington In 2009, a pharmacy paid $103.50 for a set. By July 2013 the price was up to $264.50, and it rose 75% to $461 by last May. This May, the price spiked again to $608.61. Unlike the small group effected by the Daraprim increase, 3.6 million Americans were prescribed EpiPens last year. This type of price hike has a much greater impact and has affected the livelihood of millions of families in the U.S. Meanwhile, Mylan CEO Heather Bresch’s annual compensation has soared more than 700%, to $19 million.
These examples, while extreme, are far from unusual … Take a look at some of the other recent price increases involving the most prescribed drugs in America …
 Pfizer’s pain medication Lyrica jumped 45% on a per-prescription basis between 2014 and 2013, according to Medicare data.  Lantus, a popular form of insulin, jumped 41% on a per-prescription basis, reaching $403 in 2014 from $285 in the prior year.  Merck’s cholesterol medication, Zetia, had a 21% jump in per-prescription prices in 2014, rising to $290.  Abilify, used to treat a number of psychiatric illnesses, rose 17% in the last year.
It’s not like this is happening behind closed doors, either. But there is something we can do about it. And it starts at the ballot box. Now, I know many of you are frustrated with what’s happening at the national political level, and I don’t blame you. However, there are state and local races where you can also make your voice heard. California is voting this upcoming November on Proposition 61, which would enact various forms of price regulation. A similar type of bill is being voted on in Ohio in 2017. If radical drug price increases are something you or a loved one have fallen victim to, please share your story with us by leaving a comment in the comment section below. Happy and healthy investing, Brad Hoppmann

Your thoughts on “Prescription drug prices are out of control”

  1. my problem isn’t life or death but it sure makes me mad. hard to believe how greedy some people are. I have psoriasis. nothing that I will die of but my ointment has gone from $95 a 6mg tube in 2015 thanks to my drug insurance. I’m a senior. this year my prescription has gone up to $300 with my drug insurance. they pay 50% so the full charge is $600 a tube. noooo, this isn’t a life saving drug. btw, this is the GENERIC of the original drug. I fully intend on writing the ceo of this company and the cfo. I just haven’t decided whether I should write a letter and kill them with kindness or write one that tells them what I REALLY think.
    yes, I blame Washington for taking bribes. something HAS to be done and done soon.

  2. YES We need to do something;;

    Especially for drugs etc I suggest the GOVERNMENT = PEOPLE should NOT regulate..
    BUT compete:
    make a manufacturing or bidding entity that SELLS at 150% of costs for
    any egregiously priced drug or other item especially health that is
    going on in the private sector; I’d be happy to suffer any start up/shut
    down costs; perhaps include a ramp down price schedule 500% -> 150% over
    10 years for GENUINELY NEW in house developed drugs/products…
    MAKE COMPETITION WORK and have a generous reward UNDER THE GOV PRICE;

    Make it transparent ; what BETTER mission for the FDA??
    Dick Gustafson
    genuinely NEW products
    developments

  3. Rather than more regulation I wonder why competitors don’t come along and sell the same drugs at cheaper prices. Do these companies have patents that disallow that? Surely there are alternatives in a lot of cases. I suspect that the heavy regulation from FDA and Obamacare contribute to this situation by making it very difficult to offer cheaper or alternative choices.

  4. As long as the lobbyists are allowed this will happen .
    My son in law is losing his battle with cancer . He asked a doctor at Mayo Clinic about a newer, proven, treatment , doctors response , “why are you asking , you couldn’t afford it anyway” .
    People are more and more interested in homeopathic medicine now but government is trying to shut that down due to drug companies paying them to do so .

  5. See previous post sent in..do the right thing and fix the problem (gutless congressmen and controlling industry).
    Use the pharmacists knowledge as gatekeeper told logically oversee this awful growing problem

  6. I have been a pharmacist for 44 years and you are right..excessive price raises and control over market forces have been going on forever..some drugs up 40x. Never effective pushback from society. To make it worse you’re right the major drug cos are gobbling up their generic competitors and rapidly raising prices on most all products. Their money-buying influence on decision-maker is also obscene. Society SHOULD
    NOT be held hostage by this industry.
    Price controls are SO LONG overdue. It’s no wonder the public distrusts our elected officials. They are part of this HUGE growing prices. Its interesting big pharmacy has kept the best source of affordable decision making out of the hands of pharmacists..the most unbiased source of good therapy.

  7. Brad, I”m confused. First, you make the case that government regulation has been hijacked by the drug companies. Presumably this has raised the bar for entry into the market and stifled competition. Then you seem to advocate price controls, which always lead to shortages. Government meddling is the problem, not the solution. Sure, regulation of pharmaceuticals is necessary, but it must be fair, efficient and transparent.

  8. this is a perfect example of the rights old tired mantra ” if we would just get rid of government controls and let free enterprise take command the country will prosper and we will all be financially rewarded” which is a load of you know what as we watch ceo,s income go thru the roof. because of corporate greed we do need government control so the sick and elderly can continue to live!

  9. It is time for individual States to enact legislation to curb corporate greed and overreach. Congress is bought and paid for, members often pushing through legislation that has the sole purpose of increasing the corporations’ bottom line. We can not expect CEO s of corporations to act any differently than what has been seen.
    Get involved before corporations bankrupt all of us!

  10. increase of prescription drugs prices are unacceptable at all.It is very unfair for these pharmaceutical companies to increase the drugs prices as and when they want to increase the companies profits by keeping patients life at a risk and withdraw heavy pay check at the expense of patients.My request to those CEOS is think and act as a human being and help fellow human beings in need of help not act like, Shylock like attitude asking !flesh of pound for flesh of pound!Last but not least Earn to live but not live to earn.

  11. Ironically, over the counter drugs and vitamins cost in addition to the RX prescriptions hurt us too. My wife had bariatric surgery 6 years ago. She must take daily vitamins and special RX that works with a golf ball size stomach. Bottom line, through Medicare our RX cost less than over the counter drugs!

  12. Drug companies charge what they want because as they say “nobody pays for their drugs”. they are paid for by welfare or insurance. Do away with both; make everyone responsible for their own drug costs. If the prescriber writes for a $200 rx the patient will likely go back to the prescriber and ask for something more reasonable pricewise. When this is repeated enough times the prescriber gets smarter and stops writing for needlessly expensive drugs. When the drug companies can’t sell the over priced drugs I bet prices come down.

  13. We went to Mexico for a few weeks last year. While there I thought I’d would find out
    how much an in hailer I use cost there. This is a very common drug, an old drug used by many. Here the cost is well over 300 dollars in Mexico 35 dollars US. I was one astounded person how can this be? I mentioned this to my doctor and the answer to me was that it is agnist the law to bring back drugs from a forgien country please don’t mention this to me again.
    Truly we have no hope here in the US they the Gov would have us starve, lose our homes and become a ward of the STATE rather than address this problem.

  14. You may not want to call a ballot proposition to lower drug prices government interference in free markets, but that’s what it is. Propositions allow citizens to enact legislation that the politicians are too bought-and-paid for to enact on their own. And this proposition doesn’t go far enough. Why should we pay higher prices for drugs manufactured in the US than citizens in Canada and many other countries pay?

    Contrary to what you believe, there really are things that governments can do to improve the lives of its citizens that cannot be achieved through free markets. Read the section on market failure in most any basic economics textbook for the conditions under which government action may be improve markets.

    We may disagree about when and under what conditions government action leads to improvement, but I doubt we’d disagree that there are situations in which government action is an improvement. The list is long, and includes things like safety belts, pollution control, standards (how do you know you get a gallon of gas when you buy a gallon of gas?), insider trading, food labeling, etc. If you want to live without these things go live in a banana republic.

  15. My daughter has very bad health, goes to doctors often, and requires prescriptions. She is a low income person, but not low enough for Medicaid. Her Rx costs are killing her and killing us, since we try to help her out. The only thing good in this picture is the rule of Obamacare that insurance companies can’t dump you for pre-existing health issues, or she would be totally screwed. The obscene pay of CEO’s is causing much disgust in the average person.

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