Although many Americans thought that the Affordable Care Act might positively impact the cost of prescription drugs, prices have only gotten more and more expensive. Theoretically, this is the free market at play, but realistically, it appears that it may be the pharmaceutical company taking advantage of sick people.
The cost of name-brand prescriptions has skyrocketed since 2007, with the cost of dozens of well established medicines for everything from blood pressure, to erections, to cancer doubling. Though the consumer price index increased by only 12% during this seven year period, an analysis from healthcare software provider found that one diabetes drug actually quadrupled in price.
The starting price of new drugs is increasing as well. According to the Memorial Sloan Kettering Cancer Center, 15 cancer drugs that were introduced in the last five years now cost over $10,000 a month.
Case in point, Earl Harford, a retired professor living in Tucson, Arizona, is now paying nearly $8,000 for a month’s worth of his leukemia medicine–thrice what he paid for when he first started taking the medicine in 2001. Over the past decade, Harford has had to pay over $140,000 to cover his medical expenses.
“They haven’t improved the drug; they haven’t done anything but keep manufacturing it,” said Harford. “How do they justify it?”
Looking past free market economics, it seems that industry consolidation might be a huge factor in these price hikes. University of Louisiana at Monroe economist Robert Kemp suggests that the recent flux of acquisitions could push prices even higher. The more drugs in a certain therapeutic area that a company has, the more price control the company will have, he explains.
“In general, concentration has been shown to lead to higher prices in most industries,” said Kemp. “That’s just basic economics.”
If these prices continue to climb, analysts predict that the market may see the first $1 million drug treatment in no time.