“Pharma Bro” Martin Shkreli, who became the face of all that is wrong with the drug industry, was sentenced last week to seven years for securities fraud. While unrelated to the criminal trial, Shkreli bought in 2015, through one of his companies, a 62-year-old drug then brazenly raised the price of one tablet to $750 from $13.50, a 5,000 percent increase. His flippant responses to the outrage earned him the moniker “Pharma Bro.”
Shkreli might be in prison, but his spirt lives on in the industry. The media storm shined a light into the predatory actions by pharmaceutical companies that consistently force financially struggling patients to buy costly prescriptions or go without. The Wall Street Journal noted that buying orphaned drugs and the jacking up the price was ubiquitous.
“More pharmaceutical companies are buying drugs that they see as undervalued, then raising the prices. It is one of a number of industry tactics, along with companies regularly upping the prices of their own older medicines and launching new treatments at once unheard of sums, driving up the cost of drugs.”
Despite the outrage about that and more recent price hikes, drug companies have shrugged off the criticism, and without a real threat of reform, continue to do business as usual. It helps that they have spread money around the country to protect themselves. The industry’s biggest trade group, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, spent $57 million to lobby in 2016, according to Kaiser Health Network.
“That’s PhRMA. They do it all” to protect drug companies from potential policy risks, Sheila Krumholz, executive director of the Center for Responsive Politics, which tracks political financing, told KHN. “And they’re going to marshal even more resources when they perceive that these threats or opportunities are most imminent.”
Drug companies will hike prices in 2018 because they don’t have any incentive to stop. As Axios reported, drug giant AbbVie predicted to Wall Street analysts that as the public outrage ebbs and political risks diminish, it would pursue large price hikes this year. And the result will be that more people will face financial difficulty just to stay alive, as this New York Times article notes.
Drug makers have raised prices on treatments for life-threatening or chronic conditions like multiple sclerosis, diabetes and cancer. In turn, insurers have shifted more of those costs onto consumers. Saddled with high deductibles and other out-of-pocket costs that expose them to a drug’s rising list price, many people are paying thousands of dollars a month merely to survive.
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