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 Prices for four of the nation's top 10 drugs increased more than 100
percent since 2011, Reuters found. Six others went up more than 50
percent. Together, the price increases on drugs for arthritis, high
cholesterol, asthma and other common problems added billions in
costs for consumers, employers and government health programs.
Extraordinary price hikes by two small companies, Turing
Pharmaceuticals and Valeant Pharmaceuticals International Inc <VRX.TO>,
drew new attention to drug costs. Turing expected to book $200
million by raising the price of Daraprim, an antiparasitic used for
a rare infection, by 5,000 percent, according to company documents
released by Congressional investigators.
Routine price increases by bigger players may draw less attention,
but they add up. Sales for the top 10 drugs went up 44 percent to
$54 million in 2014, from 2011, even though prescriptions for the
medications dropped 22 percent, according to IMS Health data.
At the top of the list was AbbVie Inc <ABBV.N>, which raised the
price of arthritis drug Humira more than 126 percent, Reuters found.
Next were Amgen Inc <AMGN.O> and Teva Pharmaceutical Industries Ltd
<TEVA.TA>, which raised prices for arthritis treatment Enbrel and
multiple sclerosis drug Copaxone by 118 percent.
The increases help explain federal data showing overall spending on
drugs rose faster than doctor visits and hospitalization over the
past five years.
Reuters based its analysis on the top 10 drugs, according to 2014
sales figures from IMS, and on proprietary pricing data provided by
Truven Health Analytics. Reuters used commonly prescribed approved
indications. Reuters shared its method and findings with the eight
companies that sell the top 10 drugs; none disputed the findings.
In general, drug companies said they set prices to recoup
investments in failed drugs, support new research and development
efforts, and pay for clinical trials to broaden the use of approved
drugs. Also, they said, medications prevent costly hospitalizations.
Some of the companies noted that Reuters' analysis of list prices
failed to capture negotiated discounts and rebates – information
they closely guard. In a few cases, companies offered a limited view
into proprietary prices.
Amgen, for instance, told Reuters that, after most discounts, the
average sales price for a dose of Enbrel is at least $200 less than
list.
And, while Reuters found arthritis drug Remicade went up almost 63
percent, Johnson & Johnson <JNJ.N> spokeswoman Caroline Pavis said
average selling price increases were closer to 5.4 percent per year.
For GlaxoSmithKline Plc's <GSK.L> Advair asthma drug, Reuters found
a 67 percent increase. But spokeswoman Jenni Ligday said that, with
discounts and rebates, prices actually fell during the period.
Even after discounts, pharmacy benefit managers told Reuters they
pay annual price increases on top medications of up to 10 percent.
By comparison, the U.S. consumer price index rose an average of 2
percent annually over the last five years.
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Dr. Steve Miller, chief medical officer of top U.S. pharmacy benefit
manager Express Scripts Holding Corp, said the current level of drug
price increases was "not sustainable."
NEW FOCUS
Drug prices have been a hot topic on the presidential campaign trail
and in Congress since Turing hiked Daraprim and Valeant imposed
triple-digit price increases on two heart drugs. Adding to the
political pressure is the practice among employers and insurers of
passing increases onto consumers.
Patricia Calopietro, 70, said she once paid $20 for a three-month
supply of Nexium. AstraZeneca Plc raised the list price of the acid
reflux drug nearly 50 percent over the past five years, and
Calopietro's insurer pushed her out-of-pocket share up to $250. She
switched to a cheaper medicine but doesn’t like how it works.
"How can I pay something like that? I'm 70 years old, and I'm on a
fixed income," said Calopietro, a retired sales manager for the U.S.
Army & Air Force Exchange stores from Lorton, Virginia.
Leading drugmakers say price hikes by Turing and Valeant are
outliers. "Our industry invests on average 20 percent of our
revenues into research and development. It's a fundamentally
different business model," said Robert Zirkelbach, a spokesman for
industry lobby Pharmaceutical Research and Manufacturers of America,
or PhRMA.
Sanofi SA, Teva, Amgen, J&J and AstraZeneca, which all have top 10
drugs, said they offer assistance to low income consumers.
AstraZeneca spokeswoman Abigail Bozarth said the company sets prices
based on market conditions, "a common practice across the industry."
Memorial Sloan Kettering Cancer Center oncologist Peter Bach said
patients would be better served if drug prices reflected value,
instead of bargaining power. Pharmaceutical "companies have complete
control over pricing in the U.S.," he said.
By Bach's estimate, increases last year on just one drug, Amgen's
Enbrel, added up to $1 billion to care costs. In a statement, Amgen
spokeswoman Kristen Davis questioned Bach's estimate, saying it is
impossible to infer revenue growth from list price increases because
of other factors, including rebates and discounts.
Davis said Amgen prices reflect research and development costs of
$33 billion over a decade. Rebates and discounts bring the average
sales price for a weekly dose of Enbrel to $704.23, down from its
list price of $932.16, she said.
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