Many of the most popular brand-name drugs increased at nearly 10X the cost of inflation from 2012 to 2017. Even more disturbing is that the CEO of a U.S. pharmaceutical company stated that the 400% price increase of one of their antibiotics was a “moral requirement.”
Since when is okay to rip off sick people to make a profit? Are high costs due to research and development or is there another way to cut costs?
According to a report released by U.S. Senator Claire McCaskill, a Missourian Democrat on the Senate Homeland Security and Governmental Affairs Committee, she discovered these shocking facts:
- Prices increased for every brand-name drug of the top 20 most-prescribed brand-name drugs for seniors in the last five years. – Approximately ten times higher than the average annual rate of inflation.
- Twelve out of the 20 most commonly prescribed brand-name drugs for seniors had their prices increased by over 50% over the past five-years. – Six of these drugs had a price increase from 100 – 477%!
- “Although prescriptions went down for these drugs, profits went up by the billions.” – 48 million fewer prescriptions were written, but total sales increased by almost $8.5 billion!
Missouri based company Nostrum Laboratories is one example of how pharmaceutical companies view their customers. Nostrum recently raised the price of nitrofurantoin – an antibiotic that treats urinary tract and bladder infections – from $474.74 a bottle to $2,393. CEO Nirmal Mulye justified the cost increase by stating, “I think it is a moral requirement to make money when you can … to sell the product for the highest price.”
Research and development and applying for FDA approval is expensive and it’s understandable that drug companies need to cover their costs and make a profit. However, pharmaceutical advertising greatly dwarfs these other expenses. Pharmaceutical advertising has soared 62% since 2012 and is projected to cost $610 billion by 2021. Worse yet, nine out of the 10 largest revenue-generating pharmaceutical companies spend more on advertising than they do on research and development!
While it’s understandable that selling pharmaceuticals is a lucrative business, excessive profits are being made at the expense and welfare of sick consumers. While the FDA and Congress are working on this problem by increasing the number of drugs put on the market (through generics, importation, and designating “clinically equivalent” medications), their efforts may be better focused on ensuring that what enters the market is fully tested and safe for consumers in the first place.