Philadelphia Inquirer Examines Price Determinants for Prescription Drugs
The Philadelphia Inquirer on Sunday examined prescription drug prices in the United States, focusing on the "complex and varied paths" medications follow from manufacturers to consumers. Because the United States does not have government-negotiated price limits on drugs, drug makers can set whatever prices they choose, and prices in the United States generally are higher than in other countries, the Inquirer reports. Marcia Angell, senior lecturer at Harvard University's department of social medicine and former editor of the New England Journal of Medicine, said, "Drug companies are investor-owed, profit-making businesses, and they will charge whatever the market will bear." She added, "Every hand that a drug passes through creams off some of the money that's paid for the drug for their own overhead and profit. It adds to the prices." What consumers pay for drugs depends on whether they have health coverage and what their health plans cover, according to the Inquirer. Retail prices can be marked up by pharmacies, depending on the store's cost of doing business and any discounts it received. Some government programs and private plans use their purchasing power to negotiate lower prices with drug makers, and people without prescription drug coverage can end up paying more than double what the government or private health plans pay. "It's very hard to get even basic and accurate information about who's paying what to whom," Alex Sugarman-Brozan, director of the Prescription Access Litigation Project, said. Gary Claxton, a Kaiser Family Foundation vice president, added, "It is virtually impossible for any of us to tell what the price[s] of drugs" are (Loyd , Philadelphia Inquirer, 5/2).
The Philadelphia Inquirer on Sunday also looked at the role PBMs play in setting drug prices. While some analysts say PBMs have limited overall drug prices during the last 10 years, others say the companies "favor new, expensive medicines over less costly, equally effective treatments" and that they often fail to pass along to consumers the rebates they secure from drug makers (Loyd , Philadelphia Inquirer, 5/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.