ROCHESTER, N.Y. – Consumers are experiencing sticker shock as they prepare for the back-to-school season. Prices for shoes, bags, and belts increased by 9% in July compared to last year. Additionally, rising prescription drug prices are adding to the financial burden, a nonprofit organization said.
A total of 583 prescription drugs increased in price this year, with a median rate of 4.5%, significantly higher than inflation. A nonprofit group called the Pharmaceutical Reform Alliance is urging drug manufacturers to lower prices in the U.S., where costs are nearly three times higher than in other wealthy nations.
“The cost of an EpiPen was $100 in 2007 when I left Congress. Fast forward to this year, the cost is $650. That is far outpacing the rate of inflation,” said J.D. Hayworth, spokesman for the alliance.
In New York, severe allergy sufferers benefit from a cap on out-of-pocket costs for EpiPens, set at $100 since Jan. 1. This cap is not in place nationwide.
“Big pharma, in terms of its profit margin, is more than twice the profit margin, more than twice the average profit margin of other companies on the S&P 500,” Hayworth said.
The complexity of drug pricing in America extends beyond alleged corporate greed. Last year, the Federal Trade Commission released a report partially blaming pharmacy benefit managers (PBMs) for the high costs of drugs.
Hayworth disagrees. “PBMs for many businesses serve as price reducers, trying to find the best prices and the most coverage for companies that need the help,” Hayworth said.
But the FTC found that while PBMs aim to reduce costs, they often profit from their role, sometimes increasing costs for patients. They develop medication lists, negotiate rebates and discounts, and pay pharmacies for drugs. Their contracts remain secret, affecting how much consumers ultimately pay.
Attempts to reach PHRMA, the trade organization for drug companies, were unsuccessful. In the past, pharmaceutical companies have cited high research and development costs and PBMs as reasons for high prices. Meanwhile, the trade organization for PBMs, The Pharmaceutical Care Management Association, recently released a statement blaming drug companies for high drug costs..
The Trump administration has ordered drug companies to lower prices by Sept. 29. Consumers can do little more than wait and see the outcome.
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