If you were to take a time machine and go back to 2006 and put a hundred bucks in a savings account with 5% annual interest, you’d have $147.50 in 2014. Not bad. But if your interest rate was tied to the annual price increases of brand name drugs you’d end up with…$202. And if for some crazy reason you just wanted to have the same purchasing power 8 years later, and tied your interest rate to inflation, you’d only end up with $125.
Clearly the increase of drug prices are out of line with the prices for everything else, and while the numbers figured above only take in to account brand name prices, generic prices are rising, too. On average, generics cost 5% more in 2014 than they did in 2013. That’s on average – some generic drug prices increased by 2,500 %!
But there’s good news on the way. Senators Sanders and Klobuchar are fighting for more affordable medication. Some more good news, at least for seniors, was released this past week. The Wall Street Journal reports that the Obama administration’s fiscal budget for 2016 calls for the government to negotiate prices for biologic and high-cost drugs for Medicare Part D. While, we’d like to see prices negotiated for all drugs, this can still represent huge savings for the government. Estimates suggest that 9.1% of national health spending could be on specialty drugs. That’s total health spending, not just drug spending.
We’re eager to see if the government will actually able to negotiate prices in 2016 – who knows how the budget will change or if Pharma will push to prevent negotiations. We’ll be keeping an eye on this and will certainly let you know.
Tagged with: Medicare Part D, Senator amy Klobuchar, Senator Bernie Sanders, Specialty Medications
Ever since the FDA approved Sovaldi (sofosbuvir), and its price was announced – $1,000 per pill – healthcare advocates, health insurance companies, pharmacy benefit managers, consumer groups, and politicians have been up in arms. Its cost, for the usual prescription of 84 pills, is about $31,000 more than the median annual household income in the United States, which is about $53,000. How could a 12-week drug treatment plan cost $84,000?! Well, the manufacturer of Sovaldi, Gilead Sciences, can charge whatever it wants since there is no equivalent brand drug or generic on the market and the U.S. government, by law, cannot legally negotiate drug prices for Medicare.
The costs to treat Hep C don’t stop with Sovaldi by the way. Depending on the genotype of a person’s Hep C, Sovaldi is prescribed as part of a medication cocktail that also includes either ribavirin or ribavirin and an Interferon treatment. Total prices for treatment can reach $160,000 but we’ll just focus on Sovaldi so as not to bite off more than we can chew.
This Twilight Zone approach to pricing Sovaldi and other specialty medications pumps up the rage volume to a frightening anti-pharma crescendo, but now a moment of silence: Thank you scientists, medical researchers, and dedicated people at Gilead for developing this truly awesome medication and bringing it to market. Sovaldi actually cures Hepatitis C, a disease that afflicts about 3.2 million Americans! Rock on Gilead! Gilead and its shareholders should and shall be rewarded handsomely.
Despite this, Gilead and the Big Pharma Gang should not be allowed to threaten the American healthcare system with obscene prices, even for their wonder drugs. Is Gilead really expecting to be paid $84,000 to treat 3.2 million people: a cost of $268 billion? That is more money than the gross national products of 150 countries! Finland’s annual economic output in 2013 was $257 billion. On to the dirty dollar details… (more…)
Tagged with: Gilead Sciences, Sovaldi, specialty drugs, Specialty Medications