Price Hikes — Even Beyond Inflation — Drive Drug Revenue
This scenario appears to play out even when demand for specific drugs doesn't match the increases. Meanwhile, Bloomberg reports that drug price surges also are a result of Food and Drug Administration safety testing.
The Wall Street Journal:
For Prescription Drug Makers, Price Increases Drive Revenue
Demand for a drug called Avonex has declined every year for the past 10. Not a problem for its manufacturer. U.S. revenue from the drug has more than doubled in that time, to $2 billion last year. The key: repeated price increases. The multiple sclerosis drug’s maker, Biogen Inc., raised its price an average of 16% a year throughout the decade—21 times in all. (Walker, 10/5)
Bloomberg:
2,000% Drug Price Surge Is A Side Effect Of FDA Safety Program
Colchicine, a gout remedy so old that the ancient Greeks knew about its effects, used to cost about 25 cents per pill in the U.S. Then in 2010 its price suddenly jumped 2,000 percent. That’s just one of the side effects of a U.S. Food and Drug Administration plan to encourage testing of medicines that have been around longer than the modern FDA itself, and so have never gotten formal approval. Companies that do the tests are rewarded with licenses that can temporarily give them monopoly pricing power as most rivals are eased or kicked off the market. The result has been a surge in the cost of drugs used in treatments from anesthesia to heart surgery and eye operations. (Langreth and Koons, 10/6)
In other news -
Reuters:
U.S. Labor Chief Tries To Calm Fiat Chrysler Worker Fears
UAW President Dennis Williams said in a Monday morning Facebook posting to Fiat Chrysler U.S. union members that he will not shift health care costs to workers from the Detroit Three automakers as he tries to lower costs by creating a pool of covered employees from the companies. (Woodall, 10/5)
