The Reason Behind Rising Pharmacy Costs

Pharma Bro.

No two words ever have encapsulated and better represented the recent trend of skyrocketing prescription drug prices.

This new term flooded the collective American lexicon in 2015 when it was attached to a young millennial entrepreneur and founding CEO of Turing Pharmaceuticals, Martin Shkreli. Shkreli gained notoriety and infamy for acquiring a 62-year-old drug used to treat parasitic infections in cancer and HIV-patients and systematically increased the cost by more than $730 per pill.

But Shkreli isn’t alone, and his profit-minded approach to pharmaceutical sales can be seen in numerous companies now capitalizing on public health supply and demand.

According to a 2016 Los Angeles Times article, rising drug prices have become the norm.

Take Ursodiol, an older medication for gallstones, which had a wholesale price in 2014 of 45 cents per pill. One generic manufacturer, Lannett Co., increased that to $5.10 per pill, and suddenly seven other pharmaceutical companies did the same.

At the heart of the issue is a simple fact: Unlike most other developed countries, the United States does not interfere with prices set by drug manufacturers. When manufacturers raise prices, the costs get passed along from insurance companies to patients in the form of increased deductibles.

Public outrage can only do so much, but sometimes it is effective.

When Mylan spiked the price for EpiPen devices, which combat potentially-fatal allergic reactions in children and adults, the U.S. Congress challenged the cost increase and the company eventually responded by offering savings cards that cut the increased price in half.

On average, Americans spend hundreds of billions of dollars per year on prescription drugs. Increased prices, according to Consumer Reports, can force patients to take health risks such as postponing or canceling doctor’s visits, avoiding recommended procedures and waiting to refill expensive prescriptions.

Little can be done to quell the trend, however, until large pharmaceutical manufacturers and health insurance companies agree to work together for a suitable cost-savings solution. In situations where a patient only has one treatment option and that option is controlled by a sole manufacturer, the patient is left without recourse. Even generic drugs, which can be produced by multiple manufacturers, have seen price increases in recent years due to unexpected production shortages associated with diminished sales volume due to competition. Drug companies also have invested heavily in specialty drugs, which cater to smaller patient groups with niche conditions. In 2015, more than half of the 56 medications approved by the U.S. Food and Drug Administration were specialty in nature. These drugs carry astronomical price tags, which get passed by insurers to consumers.

For patients, the hope for some relief likely must turn to elected representatives in state and federal government. Lawmakers can at least initiate discussions with drug manufacturers about a variety of potential savings efforts:

  • Establishing a limit on out-of-pocket patient costs.
  • Accelerating approval of more generic forms of common medications.
  • Allowing limited importation of prescription drugs from other countries, such as Canada.
  • Initiating a “march-in,” which allows federal officials to force sole manufacturers to allow other companies to produce cheaper generic versions of an expensive drug.

The public also can talk to their physicians about cheaper therapeutic alternatives. Patients can negotiate lower prices by shopping different local drug providers. Individuals can utilize the internet to find resource websites such as, which aggregates the fair price of most medications, and, which provides low-cost, online prescription services.

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