Pharma Firms Buy Drugs, Immediately Hike Prices

One health care expert calls it 'highway robbery'
By Jenn Gidman,  Newser Staff
Posted Apr 27, 2015 3:30 PM CDT
Pharma Firms Buy Drugs, Immediately Hike Prices
Companies are hiking prices of prescription drugs almost as soon as they buy them.   (Shutterstock)

If you've noticed the cost of your prescription meds creeping up, it might be because their original manufacturer sold them to another company, which then went ahead and hiked up the price. It's a pharmaceutical industry tactic being used more often to increase sales and bring more money in for shareholders without having to invest years and money into R&D for new, improved drugs, per the Wall Street Journal. And that price hike isn't insignificant: Express Scripts Holding Co. found a 127% increase in prices of branded drugs since 2008, per the Journal. Complicating matters is that most patents aren't due to expire in the near future, which means it will be more difficult for less expensive generics to vie for their slots, the paper notes.

As an example, the Journal examined the recent price timeline for Vimovo pain tablets, whose rights were scooped up by Horizon Pharma from AstraZeneca in November 2013. On the first day of 2014, Horizon hawked a 60-pack of the pills at a 597% increase, per health-care-data firm Truven; on Jan. 1 of this year, that same pack saw another 75% increase. The Cleveland Clinic's chief pharmacy officer tells the Journal that the greater expense for two Valeant heart medications has effectively put the kibosh on any savings the clinic had hoped to achieve this year. "We will have to cut costs, but I don't have a plan yet," he tells the paper. A director at the University of Utah's Health Care drug-info service has a blunter reaction to recently witnessing a pain medication go up 2 ½ times in list price just three months after being purchased by a new company: "It seemed like highway robbery," she tells the Journal. (When patents expire, prices seem to jump, too.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.