Drugmakers continue to raise their prices despite criticism
WASHINGTON: After Martin Shkreli raised the price of anti-parasitic drug Daraprim more than 50-fold to $750 (R12 038) a pill last year, he said he wasn’t alone in taking big price hikes.
As it turns out, the former drug executive was right. A survey of about 3 000 brandname prescription drugs found that prices more than doubled for 60 and at least quadrupled for 20 since December 2014.
Among the biggest increases was Alcortin A, a combination steroid and antibiotic gel to treat eczema and skin infections: The price soared 1 860 percent, or almost 20-fold, during the period.
And a vial of Aloprim, a Mylan drug for cancer complications, more than doubled, according to the survey by DRX, a provider of price-comparison software to health plans. Drug pricing will come under scrutiny tomorrow as pharmaceutical executives appear before a congressional hearing.
Even after soaring prices became an issue in the US presidential campaign, the cost of many drugs has continued to rise at annual rates of more than 10 percent.
Drugmakers raised the prices of products as wide-ranging as erectile dysfunction drug Viagra, heart treatments, dermatology medicine and even brands that long have lost their patents. While speciality companies have had the steepest hikes, giants such as Pfizer Inc and GlaxoSmithKline Plc kept pushing through smaller rises.
“The data shows that price increases are an integral part of the business plan,” said Jim Yocum, executive vice-president at DRX.
Pharmaceutical companies often boost prices around the end and the start of the year, and the scale of recent increases was higher than what Yocum has seen in the past few years. About 400 formulations of brandname drugs went up at least 9.9 percent since early December, according to DRX.
Drugmakers say they offer significant discounts off the list price to insurers, and inexpensive generic alternatives are available. And they say they invest large amounts in research and development to come up with new breakthroughs.
Among recent increases by the world’s biggest pharmaceutical companies is AstraZeneca’s blockbuster cholesterol drug Crestor, up 15 percent ahead of the arrival of a generic version in May.
AstraZeneca said that it decides on price changes annually based on market conditions, a common industry practice, and it offers a savings programme on Crestor that reduces co-payments to as little as $3 per prescription.
Pfizer raised prices for 24 drugs by 12 percent or more in the past two months, with Viagra increasing about 13 percent and two heart drugs whose price went up 44 percent and 86 percent, according to DRX.
The New York-based drugmaker said list prices don’t reflect discounts offered to the government, managed-care organisations, commercial health plans and programmes that restrict any increases above the inflation rate. In the US biopharma business, the average price increase was 6 percent last year, Pfizer said.
GlaxoSmithKline increased prices by 15 percent on 22 products over the past two months, including Lamictal XR for epilepsy, according to DRX. “Price increases for some medicines are a reality in a competitive US marketplace and we strive to handle them thoughtfully,” Glaxo said.
After discounts, the London-based company said US prices declined from 2014 to last year. Mylan declined to comment.
Valeant said it sets prices based on factors such as the cost of development or acquisition of a drug, its benefits versus alternative treatments, and the availability of substitutes or generics.