Among a plethora of zany US public policies that won’t die is pharmaceutical companies’ legal right to price life-saving drugs however high they please, as long as they hold the patent. Insurers often have no choice but to cover these drugs, driving up people’s premiums and copays. A Reuters analysis finds that pharmaceutical companies have doubled the initial price of their new drugs treating rare diseases in the three years between 2021 and 2024.
Pharmaceutical companies have always taken advantage of their monopoly pricing power. The US is the only country that does not regulate the price of prescription drugs. And, not surprisingly, on average, we pay three times more than people in other wealthy countries for our drugs.
President Trump has not yet used his executive authority to lower drug prices or to direct Congress to lower drug prices. While he claims he’d like to, time will tell if he will. Right now, he could direct Congress not to touch Medicaid in its reconciliation package and, instead, bring down drug prices. And, he has not.
President Biden supported the provisions in the Inflation Reduction Act that allow for some Medicare drug price negotiation. That was a step forward in preventing drug companies from controlling prices. However, the law only applies to Medicare and only for a small number of drugs. President Trump has called for a change in the law that would significantly narrow that already small number of drugs.
No one should be surprised that the median launch price for a new drug treating a rare disease in 2024 was a whopping $370,000, $70,000 more than in 2023. In 2021, the median launch price for one of these new drugs was a whopping $180,000. Insanity. These drugs often treat different cancers.
Some drugs treating rare diseases cost more than $1 million dollars today. One of the highest-priced drugs treats a genetic disorder harming the brain and nervous system. The single treatment–which is all you need, thankfully–costs $4.25 million.
Here’s more from Just Care:
- Will new Trump executive order lower drug prices?
- Tariffs will likely drive drug prices higher and create drug shortages
- Drug prices continue to be around three times higher in the US than other wealthy nations
- Don’t rely on Mark Cuban’s Cost Plus Drugs for the lowest prices
- Millions safely import low-cost drugs from abroad
