Earlier this month, President Trump announced plans to lower drug prices, blaming the high cost on foreign governments, Pharmacy Benefit Managers, expired patents, lack of transparency and specific regulations and complicated laws.
In the weeks after this announcement, several pharmaceutical companies declared their commitment to limiting increases in drug costs. Managing Principal David Pittard at OneDigital Marietta, comments on the commitment from pharma companies in the article, “More Manufacturers Freeze Drug Prices: Will Positive Momentum Last?” by Managed Healthcare Executive.
In recent years, prescription drugs must be one of the only ‘goods’ in the market where new entrants provide credence for existing suppliers to raise the price. When Norvartis rolled out Cosentyx a few years ago, Amgen and AbbVie immediately increased the prices of Enbrel and Humira, respectively. The result of the new prescription has been over a 200% price increase for the existing medications in a five-year period—I’m certain General Motors would like to increase the price of Cadillacs 200% just because Hyundai is now making luxury cars. Historically, drug manufacturers have justified their high prices for having to compensate for years of R&D, public sector health plan reimbursements, and limited patent rights. That could be more justified in the initial years of the drug being released into the market; but, significant increases many years later is unjustified.
— David Pittard, Managing Principal, OneDigital Marietta
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