Despite the government’s efforts to drive down health care costs, many of the largest drug companies are currently raising prices. The price of more than 350 branded drugs in the United States is set to increase this month. These hikes address common vaccines and even life-saving treatments for illnesses such as cancer.
Which Medications are Becoming More Costly?
The potential increases would apply to a range of popular drugs. The biggest of all include vaccines for Covid-19, shingles and RSV. Pfizer, one of the biggest drug companies in the world, is setting the pace with sharply higher prices on around 80 different drugs. That ranges from their blockbuster cancer drug, Ibrance, to their Covid treatment, Paxlovid.
While the majority of these price increases are about 4%, some are significantly higher. As an example, the cost of Pfizer’s COVID vaccine is anticipated to increase by 15%. Other companies, including GSK, will increase the prices on roughly 20 of their drugs and vaccines as well. Although the government has been striking deals with some companies to lower costs for people of modest means, many of those same companies are still jacking up the “list price”, the starting price, on their products for everyone else.
Why Prices Keep Going Up
Drugmakers argue they have to increase prices as their own costs rise. They say that they need money from these sales to help pay for “research and development,” the costly process of inventing new medicines. Pfizer said its price hikes are also still trailing the overall pace of inflation which is a more general increase in prices across the whole economy.
But many experts think the companies are simply working to protect their profits. Because the U.S. has no stringent guidelines on what a drug can cost, it’s up to companies to set their own prices. This is why Americans frequently pay nearly three times as much for the same drugs as people in other wealthy countries. Some researchers suggest that as companies strike small deals with the government to lower some prices, they increase others or recoup their money in other ways.
Some Prices are Actually Falling
For patients, it’s not all doom and gloom. Some drugs are actually going to get cheaper this year. Among the most significant changes is for a diabetes drug, Jardiance. The government has negotiated a special deal for people on Medicare, cutting its price by about 40%. It is part of a new program in which the government negotiates directly with drugmakers to obtain a better price for seniors.
In all, roughly nine different drugs will face price reductions this January. That suggests that while prices are rising across the board, public and government pressure is starting to produce some modest effects. There will be more negotiations later in the year, and many here are hoping that even more major drugs will eventually become cheaper for all.
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