You pay how much for drugs?

I’ve never seen Americans so outraged by the news of the Turing Pharmaceuticals CEO, Martin Shkreli, raising the price of Daraprim, an anti-parasitic medication used to keep some critically sick people alive.  Daraprim is a prescription drug that has been around for over 60 years and has been relatively inexpensive to buy.  But the world of pharmaceuticals is changing quickly with mass consolidation and this inexpensive drug that has been around for decades suddenly took a steep price increase – to the tune of 5500%! 

I personally see an even bigger issue.  If you take this same principle thinking and apply it to a drug class like HMG CoA Reductase Inhibitors (more commonly known as “statins”) - a drug class that an estimated 25 million Americans take on a monthly basis, the numbers and associated costs skyrocket.

For demonstration purposes, let’s assume the current price of a statin is $10/mo, or about $120 per year.  If a single manufacturer buys up the rights to produce the medication, or there is collusion to raise the price universally by all manufacturers, this price could increase infinitely.  If we apply the same 5500% increase the resulting cost to the healthcare system would be an additional $162 Billion.  If you add some of the more well known drug classes to treat common conditions like diabetes, hypertension and asthma – it could mean TRILLIONS of dollars to the system. The result could be catastrophic to both the health of those people taking the life-saving medicine as well as the healthcare system as a whole.