Inflation Is Nothing Compared to the Rise of Drug Prices

The crisis of 2020 is at its peak in the USA, but hopefully, things are getting better. Nevertheless, the consequences of the pandemic combined with the implications of the worldwide financial downfall resulted in price rises on numerous brand medications released on the territory of the USA and many other countries as well.

According to the information from, about 460 prescription medicines have become costlier in 2020. The average price rise is 5.2%. The representatives of the federal government promise to take measures against the price growth on lifesaving meds.

Why Are the Drug Prices Growing?

In 2018 the price inflation had already been considered negative regardless of Trump’s promises to make pharmaceutical companies discontinue the unjustified price increase. Pharma mastodons excuse themselves saying they have to use better, costly technologies. In fact, they partially alter the composition of most-wanted medications to have a chance to sell them as new ones.

Besides, the drug companies state that they have to pay more to third parties and middlemen, including health insurance companies and pharmacy benefit managers – a price fraction that is not incurred in the prices at Canadian pharmacy, a no-markup product store that delivers in the US and overseas.Nevertheless, there are facts that drug consumers understand better:

  • In January, they have a reset of their insurance deductibles. They have to dig deeper into their pockets to pay for the prescription meds they should regularly take because of the yearly price rises. There are also coinsurance medications, which are rare, expensive products.
  • Prescription drug prices are getting higher because the pharma market has nothing in common with any regular market because it is controlled by pharmacy benefit managers. They pick out the most expensive medications to add to the Americans’ insurances the attract more insurance companies.

As a result, all pharmaceutical middlemen get higher rebate payments concentrating on the potential benefit, rather than the patients’ health. Pharma companies are not trying to satisfy their clients because the patients don’t have much choice. They have to pay for what they are given with no alternatives.

Trump Administration Reaction

To reduce the number of drug price increases, President Trump administration is doing the following:

  • Arrange the sales of generic medications and over-the-border pharma products, which is one of the first steps to the competitiveness in the American pharma market. At present, the consumers have managed to save about $26 billion on their regular meds thanks to the generic products approved by the FDA.
  • Make pharmaceutical companies provide American citizens with a sufficient amount of discounts and stop prioritizing price reductions for over-the-border buyers.
  • Urge drug companies to disclose the prices of medications in their advertisements.

Discounts Are Not Effective

The anti-competitive regulations in the USA let pharma companies fully control the net costs on their meds. Yearly discounts only cause substantial net costs rises, and, as a result, a significant list price rise for the buyers.

List prices are highly important for the research, but the analyses of net price on meds show the full picture. About six hundred medicines, adjusted for inflation, demonstrated an incredible price rise:

  • List prices have grown by about 160%;
  • Net prices have grown by about 60%.

In general, the prices of pharma products skyrocketed three times more than inflation rates.

Most people are not obliged to know this information, but they do not get much of the discount they think they get. Part of these discounts goes to insurance companies that can be private or public.

Specialty Drugs Partially Determine the Prices

It turns out that rare specialty drugs also cause severe increases in prices. They make up only a bit more than 2% of the prescription medication list, but they are so expensive that the buyers have to spend about half of their healthcare expenses on them.

For example, there’s a potent and expensive med that can treat patients with spinal muscular atrophy — Biogen’s SPINRAZA™. It’s a unique and costly drug approved by the The personnel of Cleveland Clinic even have a special protocol concerning the possible and unwanted waste of it because the med costs them about $750,000 every year.

Positive Signs

It’s not all bad because the FDA started accepting biosimilar products in the pharma market. The abundance of alternative medications produced by the over-the-border pharmaceutical laboratories can decrease the prices by about 30%. Generic meds and biosimilar remedies finally make up the base for competitive sales of meds in the country.

Unintended Consequences

  • The FDA has the right to remove unapproved, but time-tested meds from the pharmaceutical market, thus reducing the number of competitive manufacturers;
  • The FDA exclusive rights, as well as fake patent loopholes, cause shortages of longstanding drugs and weaken the overall competitiveness.

Getting Away with Murder: Trump’s Opinion

Donald Trump stands in solidarity with Bernie Sanders, saying that “Pharmaceutical companies get away with murder.” The skyrocketing price-tags on medicines seem to be artificial. The pharmaceutical companies are not willing to invest their financial benefit into the potential health of their clients. It’s not the market that determines the prices, but the drug makers themselves.

Donald Trump promises to establish alternative bidding procedures to let the pharma market control itself. He notes that:

  • Pharma has too much power in the USA;
  • American production of medicines is horrible and mostly results in shortages of lifesaving meds;
  • The medicines from overseas are coming and will keep on coming back to the country.

One of the most disturbing things for the investors, as well as for the average American residents, is that Clinton was tougher in matters of healthcare, and Trump has not met the expectations.

Nevertheless, he is planning to reveal his new plans that will help to reduce the current prices. Among the planned measures, we already know something about the following ones:

  • Reimbursement of doctors and medical professionals in accordance with the international average prices for their services;
  • Temporary discouragement of innovation in pharma production because it’s a very challenging and pricey process that costs about $3 billion dollars every year.

A plan like this has the potential to become one of the greatest fails of Trump’s policy, as it will establish numerous limitations on the healthcare system, which can be life-threatening to the patients. However, we are not aware of the complete list of measures the President is going to take. We only hope that he will keep the patients away from the situation when they have to choose between food and medicines.

Stop Rx Greed Campaign & AARP

AARP (American Association of Retired Persons) members have arranged a campaign destined to provide senior patients with lifesaving meds for affordable prices. These people understand that the majority of Americans depend on many prescription medications. These are diabetes, cancer, and blood pressure medicines one cannot afford at present.

AARP appeals to the Congress and governmental pharmaceutical institutions with the Stop Rx Greed Campaign. Honest taxpayers from all over the country are urged to become members of AARP and vote for the legislation destined to keep the prices on meds competitive. Medicare should have a possibility to control the pharmaceutical market prices so that the meds within the borders of the country don’t cost more than in any other state of the world.

Send your message to AARP members to find out how you can affect the negative situation in the pharmaceutical market of the USA.



No responses yet

Leave a Reply

Your email address will not be published. Required fields are marked *