Every American deserves access to affordable, high-quality care and health coverage — and that includes getting the medications they need at a cost they can afford. But drug prices are out of control. And while Big Pharma is posting record profits, too many hardworking Americans are forced to choose between paying their bills and accessing life-saving medicines.
Big Pharma alone controls their prices—and they alone can lower them for Americans today. Instead, they continue to raise prices year after year, making health care more expensive for everyone.
To better understand skyrocketing prescription drug costs, authors of a recent article published in the Journal of the American Medical Association (JAMA) examined the trends in launch prices for newly marketed drugs. The analysis included over 500 drugs launched between 2008 and 2021.
The study found that drug launch prices increased from an average $2,115 per year in 2008 to $180,000 per year in 2021. From 2008 to 2021, launch prices for new drugs increased by 20% each year. Oncology drugs and drugs treating rare diseases had the highest launch prices at $155,000 per year and $168,000 per year respectively. And almost half (47%) of drugs launched in 2021, were initially priced above $150,000 per year, including 6 drugs with prices exceeding $1 million a year.
And even after the launch of drugs, Big Pharma continues to increase drug prices. A recent JAMA article reported that between 2007 and 2018 net prices for branded drugs increased 4.5% every year. According to a RAND analysis, Americans pay the highest drug prices among the developed nations. On average, brand drugs in U.S. cost more than three times as much as they do in other developed countries.
Pharma companies argue that high drug prices are necessary to cover the increasing costs of drug development; yet a recent AHIP analysis found that pharmaceutical companies spend more of their money on marketing and administrative expenses than on research and development.
Drugmakers create life-saving treatments and breakthrough cures. But their treatments and therapies are useless if no one can afford them. That’s why health insurance providers are committed to containing drug prices and keeping health care affordable through negotiated drug rebates and discounts, saving millions of dollars for patients every day.
We should not have to choose between affordability and innovation when it comes to prescription drugs. We deserve both. And with the right solutions and genuine collaboration, we can achieve both as well.