Amid intensifying debate over the rising cost of medicines, drug makers are often criticized for regularly raising prices, a tactic that sparks outrage given that the actual value of the drugs remains unchanged. Now, though, a new study of drugs’ list prices has quantified the extent to which price hikes have not only raised costs in recent years, but have also outpaced inflation by leaps and bounds.
To wit, the costs of oral and injectable brand-name, outpatient drugs increased annually between 2008 and 2016 by 9 percent and 15 percent, respectively, and the price hikes were largely driven by existing drugs, such as insulin. When excluding new drugs — those that became available within three previous calendar years — annual costs rose by 8 percent and 16 percent for oral and injectable medicines. This was five to eight times the general rate of inflation in the same time period.
“A higher price for a new drug may make sense if it is safer or more effective or treats a disease you could not previously treat,” said Inmaculada Hernandez an assistant professor at the University of Pittsburgh School of Pharmacy and study co-author. “So, yes, there can be value, but the increases that we found for existing medicines do not reflect an improvement in value.”
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Yawn. Another study of list prices. Amazing how the press jumps all over these incomplete and misleading studies.