Big Pharma Quietly Hikes Drug Prices 100 Percent or More
by David Gutierrez
Without any fanfare, pharmaceutical companies have been raising the prices of many of their drugs by 100 percent or more, according to a study conducted by researchers from the University of Minnesota.
The researchers investigated cases in which drugs had their prices increased by 100 percent or more in a single cost adjustment, finding that drug companies had done so for 26 products in 2006. Questcor Pharmaceuticals, for example, increased the price of its drug Acthar (used to treat spasms in infants) by 1,424 percent, from $1,650 per vial to a whopping $23,000.
The practice seems to be getting more common. In 2004, only 15 drugs had their prices so drastically increased. By only the first half of 2008, however, already the prices of 17 drugs had at least doubled.
"There's no simple explanation," said Stephen Schondelmeyer of the University of Minnesota. "Some companies seem to figure no one is watching so they can get away with it."
The trend has started to draw legal attention, however.
Recently, Abbot Pharmaceuticals settled a lawsuit over its 400 percent price hike for Norvir, an HIV/AIDS drug. The company agreed to pay as much as $27.5 million in compensation, but not to lower the price of the drug.
Senators Amy Klobuchar and Charles Schumer have called on the Government Accountability Office to investigate the price increases. In addition, Klobuchar has asked the Federal Trade Commission to investigate Ovation Pharmaceuticals for drastically raising the prices of four drugs in 2006. In one case, the price of the tumor drug Cosmegen increased from $16.79 per dose to $593.75 per dose, or 3,436 percent.
"This does drive up the price of health care," said Alan Goldbloom, president of Children's Hospitals and Clinics of Minnesota. "Hospitals are either eating the cost or passing it along to insurers, so you and I are paying it in increased premiums."