One of the most significant struggles facing millions of Americans today is the growing cost of pharmaceuticals. According to U.S. News and World Report, U.S. drug spending is expected to exceed $300 billion in 2015, and many analysts project drug prices will continue to rise for the foreseeable future. In the wake of these price increases, a national, often politics-driven, conversation about the future of the pharmaceutical industry has once again reared its ugly head, spurred on by stories of seemingly outrageous drug price hikes.
For instance, in September, Turing Pharmaceuticals announced it was raising the price of Daraprim, one of its antiparasitic drugs used to treat infections, from $13.50 per tablet to $750.00 per tablet, an increase of 5,455 percent.
Many new drugs are now entering the market at significantly higher prices than they were just a decade ago. As explained by Jonathan Rockoff in The Wall Street Journal, “The average cost of a branded cancer drug in the U.S. is around $10,000 a month, double the level a decade ago, according to data firm IMS Health.”
The backlash against Turing and chief executive Martin Shkreli, who has since been arrested on fraud charges, has been swift and damning, with politicians, protestors, doctors, and health care advocates all accusing Shkreli of being a ruthless capitalist hell-bent on gouging sick consumers. Many called for greater control of the pharmaceutical industry. Even highly controversial Republican presidential candidate Donald Trump leveled attacks against the 32-year-old hedge fund manager, calling him a “disgrace” and the price increase “disgusting.”
Pharmaceutical companies have often blamed price hikes on ever-increasing research and development costs. It’s now estimated new drugs cost an average of $2.6 billion to develop, and the only way drug manufacturers say they can afford to navigate the incredibly complex process of creating breakthrough drugs is to raise prices on new and existing drugs.
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