In January, President Donald Trump accused the pharmaceutical industry of “getting away with murder” with high price increases, and promised to do something about it. He’s set to share his plan to do so Friday.
The amount Americans spend on prescription drugs has nearly doubled since the 1990s, a 2017 government investigation found, meaning the United States spends the most of any high-income nation. List prices rose 6% over the past 12 months alone, according to the prescription website GoodRx. Medicare drug prices soared 10 times the rate of inflation.
Americans didn’t always spend the most. In the 1980s, several countries spent equally, but US spending grew faster in the 1990s, according to a 2017 analysis from the Commonwealth Fund. This was partially because several expensive specialty drugs came to market, and because drug companies that set the price in the United States, unlike in Europe, which has price controls.
Americans often pay substantially more for the same drug than people in other countries do.
Why prices are so high
Generic versions of these medications can lower costs, and they now make up 90% of dispensed prescriptions, according to the IQVIA Institute for Human Data Science. Typically, multiple generic options are needed for one drug before it gets cheaper, according to a study published Tuesday in the journal Health Affairs.
“I think patients are right to have serious concerns about pricing,” said study author Stacie Dusetzina, an associate professor in Vanderbilt University’s Department of Health Policy and Ingram associate professor of cancer research. “And in many cases, insurance benefits aren’t generous if they have insurance, meaning patients often pay far too much out of pocket. In some cases, people wind up draining their savings or losing their homes.”
Modern drugs are often necessary to save lives, and drug companies blame the expense on the high cost of making them and getting approval from the US Food and Drug Administration.
“That’s a myth that is prevalent in the pharmaceutical industry that drugs are so expensive because companies are taking all that money and plowing it back into research and development to discover the new drugs of tomorrow. That’s not really true,” said Dr. Jerry Avorn, a professor of medicine at Harvard Medical School .
He co-authored a 2015 study that found that a couple dozen game-changing drugs were based on research done not by pharmaceutical companies, but by federally funded academic researchers.
“Making drugs affordable would not destroy innovation,” said Avorn, who is chief of the Division of Pharmacoepidemiology and Pharmacoeconomics in the Brigham and Women’s Hospital Department of Medicine.
“Since companies set prices to whatever the market will bear, then it is not really a surprise that most companies which are for-profit want to get their shareholders the maximum price,” Dusetzina said. “That’s merely being a rational actor in this marketplace.”
PhRMA, the pharmaceutical industry group, did not respond to a request for comment in time for publication.
The highest price tags
Plenty of patients with common health problems shudder about the costs of drugs, but the most expensive drugs typically treat rare diseases. A few cure hepatitis C, which afflicts 3.5 million Americans; those medications, though expensive, need to be taken for only a short amount of time.
There are, however, drugs that patients take for life that cost tens of thousands of dollars each month. Manufacturers offer coupons and set up nonprofits to help defray costs, but not all patients qualify for either, Dusetzina said.
Duzetzina points to Revlimid, which treats blood cancer and costs about $20,000 for a 30-day supply. A patient on Medicare Part D, the program’s prescription plan, pays 5% of the price, about $1,000 a month, plus a $5,000 copay.
Some drugs have hit the $1 million mark, including a gene therapy, Luxturna, that can restore sight to children with a rare retinal disease and might cost $1 million. A drug to treat hemophilia B that’s making its way through the approval process, SPK-9001, could cost $1.5 million.
GoodRx, which tracks drug prices, ranked the most expensive drugs available on an outpatient basis, based on the wholesale acquisition cost that a typical patient in a typical case would typically use in a month. That’s not necessarily what you’d pay, as several steps can add expense before it gets to you, but it’s an example of how expensive drugs can be.
Here are the five most expensive drugs in the United States:
1. Actimmune: $52,321.80 for one month
Actimmune is used to boost the immune system in chronic granulomatous disease. It can also slow malignant osteopetrosis, a rare bone-hardening disorder.
Chronic granulomatous disease is a rare genetic disorder that affects cells in the immune system and stops a body from fighting infections effectively. A person with this disease will typically get a serious bacterial or fungal infection every three to four years. About one in 200,000 to 250,000 people worldwide has it, according to the National Institutes of Health.
2. Daraprim: $45,000 for one month
Daraprim is an antiparasitic used to treat toxoplasmosis, an infection caused by one of the most common parasites in the world. More than 60 million Americans may be infected with it, according to the Centers for Disease Control and Prevention, but people with healthy immune systems rarely have symptoms. Those with compromised immune systems and pregnant women can have serious reactions such as brain disease, blindness or miscarriage.
Maker Vyera Pharmaceuticals, formerly known as Turing Pharmaceuticals, faced questions from Congress when its former CEO raised Daraprim’s price from $13.50 a pill to $750. Despite the scrutiny, the price remains high.
Curtis Jackson, a pharmaceutical investor to whom Vyera referred questions, said that it takes about a billion dollars to create a drug. Daraprim was created in 1952, he said, so the money it brings in now doesn’t pay for its development but is being used to create a new version.
“Hopefully, we won’t need this one in three years, when the other is approved,” Jackson said. The current version is “so toxic” that a lot of doctors won’t use it, he said.
Vyera donates 60% of the Daraprim that’s produced and offers it at half-price to hospitals, he said. He also noted that acute treatment for patients on Daraprim usually lasts six weeks or less.
3. Cinryze: $44,140.64 for one month
Cinryze is a C1 inhibitor to prevent attacks in people with hereditary angioedema, a rare condition that occurs in one in 10,000 to one in 50,000 people. The attacks involve swelling of the skin, mucous membranes or both. They can affect a person’s upper respiratory and gastrointestinal tracts and can be fatal.
Drug maker Shire PLC said in a statement, “Shire is committed to responsibly pricing our products to reflect their value and to help support patient access. If the therapy provides a meaningful impact on the lives of patients, if it fulfills that high, unmet need, value is created, and we price our products commensurate with that value. This approach also enables us to continue to invest in developing innovative therapies for patients living with rare conditions.”
4. Chenodal: $42,570 for one month
The drug is manufactured by Retrophin, which did not respond to a request for comment.
5. Myalept: $42,137.60 for one month
Myalept is an injectable that helps people with leptin deficiency, a rare disorder; only a few dozen are cases reported in the medical literature, according to the National Institutes of Health. Leptin is an important hormone that helps control metabolic processes. People with generalized lipodystrophy have little or no fat tissue all over the body. The drug lowers triglycerides, blood sugar and A1C levels.
It’s manufactured by Aegerion Pharmaceuticals, which did not respond to a request for comment.