Breaking the cycle of big drug company price increases

by | Apr 9, 2024

Every January, like clockwork, big drug companies raise prescription drug prices.

The start-of-year price hikes are part of an annual cycle where drug companies raise prices in two batches, once in January, and again in June and July. During the first two weeks of 2024, drug companies raised prices on 775 brand name products. The 4.5 percent median price increase outpaced the 3.4 percent inflation rate, meaning that Big Pharma is not just keeping up with higher costs, they are raising their prices faster than just about anything else to pad their profits.

The latest round of price increases will hit a wide range of patient pocketbooks. Among the drugs subject to price hikes are Ozempic, a popular diabetes and weight loss treatment that now has a price tag of nearly $1,000 per month; Wellbutrin, an antidepressant subject to a 9.9 percent price increase; Eliquis, a common blood thinner that is now priced at $600 for a month’s supply following a 6 percent increase; and Skyrizi, a psoriasis treatment with a 5.8 percent price increase that is now up to over $21,000 per dose.

Higher prices for the medications that many patients depend on come as Floridians are already struggling with their health care and prescription drug costs. A recent poll released by Floridians for Government Accountability shows that although Florida likely voters are relatively satisfied with prescription drug accessibility, availability, and quality, 54 percent are dissatisfied with prescription drug cost. This is not surprising when you consider that 57 percent report that their personal health care and prescription drug coverage has gotten more expensive in the past year.

Last spring, state lawmakers heralded steps that are supposedly going to help bring down prescription drug costs. However, as the most recent drug price increases show, their efforts focused on the wrong part of the health care system. Legislators passed new regulations that restricted pharmacy benefit managers (PBMs), which create lower-cost pharmacy networks and are among the only entities in the system who effectively negotiate with drug companies to contain price increases.

These new government regulations conflict with Floridians’ preferences and needs. An overwhelming 73 percent majority of Florida likely voters report that they would rather pick up their prescription at a specific pharmacy for a discounted price, rather than picking up their prescription at any pharmacy at the regular price. This is exactly the type of cost-cutting private sector solution that burdensome pharmacy benefit overregulation undermines.

On January 5, Governor DeSantis announced that Florida was approved to be the first state in the country to begin importing cheaper prescription drugs from Canada. Hopefully, this signals a shift in focus to hold drug companies responsible for outrageous prices.

A sustained drug company accountability effort is not only the best way to make a meaningful dent in drug prices, it’s also popular. Voters say that big drug companies are most responsible for the cost of health care and prescription drugs in Florida (38 percent), while few report that PBMs are most responsible (4 percent). There is also broad consensus that additional action is required, as 81 percent of likely voters say that more should be done to address big drug companies’ role in increasing the cost of prescription drugs.

Unless we see a long-term change in how lawmakers approach high prescription drug costs, the pattern will remain the same. This summer, big drug companies will announce hundreds of additional price hikes, followed by hundreds more next January. Florida patients, taxpayers, and health care plan sponsors, from small businesses to local governments, will pay more, while drug companies rake in larger profits.

Voters know who is responsible for the high cost of their medication and our lawmakers need to get on the same page. It’s high time to break the cycle of big drug company price hikes – and stop falling for the Big Pharma blame game that points fingers at anyone who tries to hold them accountable.

Jim Maxwell is the vice-chairman of Floridians for Government Accountability.


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