May 23, 2016
A recent study by AARP shows the average cost of the prescription drugs most widely used by older Americans more than doubled between 2006 and 2013. Since 2013, other studies show that prescription drug costs have continued to rise at more than 10 percent a year.
“It used to be the drug companies only took one price increase a year,” said Dr. Steve Miller, the chief medical officer at Express Scripts, a major drug benefit management company. “Now what they are doing is taking multiple price increases multiple times a year.”
Some of these price increases have been for generic drugs, where prices are normally stable or even go down slightly over time.
Why is this happening? Analysts say one reason is because of mergers and buyouts of generic drug manufacturers that have reduced competition between them. A second reason is that brand name drug companies have been paying generic manufacturers to not produce generic versions of brand name drugs when the patents on these drugs expire.
The pharmaceutical companies are only incidentally in the business of producing drugs that contribute to health. Their main business is to produce profit.