Weekend Economists American Bad Boys Part 1 July 12-13, 2014

[Demeter]

4. Rapid Price Increases for Some Generic Drugs Catch Users by Surprise

http://www.nytimes.com/2014/07/09/health/some-generic-drug-prices-are-soaring.html?_r=1

...His patient had been on the drug, digoxin, for many years. A mainstay of treating older patients with rapid rhythm disturbances, it was first described in the medical literature in 1785. Millions of Americans still use it every day, and many had long paid just pennies a pill....the price of generic digoxin was rapidly rising. The three companies selling the drug in the United States had increased the price they charge pharmacies, at least nearly doubling it since late last year, according to EvaluatePharma, a London-based consulting firm. For patients, that meant the prices at pharmacies often tripled from last October to this June, according to Doug Hirsch, chief executive of GoodRx.com, a website that tracks drug pricing to help consumers find good deals. And while the average price tag at the pharmacy for a month of digoxin this year is still relatively cheap, about $50, he said, some patients are now encountering costs of more than $1,000. That can translate into co-pays of hundreds of dollars.

No wonder, Dr. Lindenberg said, that he began hearing from patients requesting a drug change because they could not afford digoxin. He noted that one patient did not fill her prescription because it would have cost her $1.60 per pill, and that she ended up in intensive care.

Large price increases in the United States for vital medicines for the young, such as vaccines, have been mirrored by similar rises in some of the most basic treatments for older patients, like digoxin. Though there are many newer types of drugs to treat heart disease, for some patients there are no effective substitutes; digoxin is on the World Health Organization’s list of essential medicines.

In recent years, generics have curbed the rise of drug prices, saving the American health care system billions of dollars.... In January, the National Community Pharmacists Association called for a congressional hearing on generic drug prices, complaining that those for many essential medicines grew as much as “600, 1,000 percent or more” in recent years. The price jumps especially affected smaller pharmacies, which do not have the clout of big chains to bargain for discounts....Digoxin provides a telling case study. There was no drug shortage, according to the Food and Drug Administration, that might explain the increase. There was no new patent or new formulation. Digoxin is not hard to make. What had changed most were the financial rewards of selling an ancient, lifesaving drug and company strategies intended to reap the benefits.


SMACKS OF COLLUSION AND PRICE-FIXING, TO ME, AND GOUGING THE OBAMACARE APPLE...