Drugmakers rang in the new decade with a 5% price increase on nearly 500 of their products, which has left U.S citizens and their insurance companies in an unhealthy situation.
More pharmacy companies are expected to report price increases in the coming months. The most widely used medicine in the world, Humira, is among the myriad of popular medications that will become even more expensive for consumers in 2020.
The White House has called upon the pharmaceutical industry to make their products more affordable to the Americans that need them — to no avail. Despite the will of the Government, pharmacy companies are completely unfettered from maximizing their profits at the expense of their consumers.
Drug prices will continue to be a core issue for voters in the upcoming election. This price increase hits home for a huge percentage of Americans that suffer from or have family members that suffer from a condition that needs pharmaceutical treatment. As such, candidates in the 2020 election will likely appeal to voters in that regard.
A Growing Trend
All products slowly increase in price over time in order to match inflation levels; however, there is an extreme difference between the speed at which drug prices increase and other products. The number of drugs that are increased each year has been widening recently, and 2020 is seeing around double the number of drug prices increased as compared to last year.
U.S citizens are already yearning for relief from the financial stress of inflated drug prices, and the explosive price increases will only lead to more expensive insurance premiums as well as out-of-pocket costs. As the disparity between rich and poor gets worse, consumers have little hope for a change of heart from the leaders of the pharmaceutical industry.
Why The United States?
Pharmaceutical companies can set whatever price they choose within the United States, whereas many Governments in Europe exert some influence over drug prices. This means that there is a serious contrast between prices in the U.S as compared to other countries. People in the United States can expect to pay far more for individual medicines and insurance premiums.
Many have demanded that regulatory bodies take action and hold drug companies to honest prices, but huge pharmaceutical corporations continue to receive Government grants alongside their massive profit margin. Companies also see the current administration as permissive to their practices.
Drugmakers continue to claim that they attempt to remain within standard inflation rates and only raise their prices in response to the market; however, it’s been reported that many drugs have their prices raised beyond the general inflation rate. Some of these price increases are five times the inflation rate, which means that drugmakers are uninterested in fair practices when the opportunity for profit is involved.
Pharmaceutical companies know that people need their products, and that they can charge exorbitant amounts for drugs that are frequently life-saving medicines. Drug companies also take great interest in lobbying against legislation that could hinder their profitability. Big pharmaceutical companies can set any price they want for a drug, then force the insurance companies to shift their policy to match the new price point.
Increased drug prices usually affect insurance companies more than the average person. It is the insurance company’s responsibility to pay the cost of the drugs, while the consumer’s premium doesn’t immediately change. This frustrates insurer’s greatly, as it simply hobbles their cashflow.
When an array of popular medicines are given a price increase, then insurance companies will eventually raise the premiums for their customers. Unfortunately, many of the drugs that are spiking in price are very popular medicines such as Cotempla XR, which treats ADHD.
Drug companies will often work with insurers by giving them rebates or discounts in order to keep prices competitive. This can help with lowering the impact price increases, but the out-of-pocket payer is left in a terrible position.
The Future of Medicine
Advancements in medicine technology has made pharmaceuticals more comprehensive in their range and ability. Because of this, many more people are using medicines to improve their life. Unfortunately, the subsequent high demand for these products has made them attractive to companies that seek profit over quality. People are willing to pay a huge portion of their money in order to be healthy, so pharmaceutical companies are practicing a despicable form of opportunism when they gouge the American public’s wealth in return for basic medicines.
Major pharmaceutical companies must be held to a fair legal standard in their trade practices. Otherwise, there will be no way to protect citizens from trade practices that should be illegal. Many big pharmaceutical companies have made a pledge not to raise drug prices higher than the inflation rate, but this has been broken frequently in the past and barely holds them accountable for their choices, if at all.
In order to move from ineffectual pledges into a system that resembles the positive sides of free trade and American business, then the next generation of Government leaders will need to take action. The White House has touted a tough hand against big pharma, but the same administration has only given more power to massive corporations — and done nothing to empower the consumer. If drug prices are left unchecked, then everyday life will only become more expensive for people suffering from a medical condition.