RunawayRx's Dose of Reality: New Report Deems Rx Drugs Culprit for Rising Health Care Costs, Blindness Gene Therapy Priced Too High, and More

January 24, 2018

RunawayRx's Dose of Reality series helps keep the public up-to-date on pharma's latest drug pricing schemes and major happenings around the industry. Our most recent edition highlights a watchdog's review of the world's most expensive drug (spoiler: it costs too much), the subtle tactics employed by a particular drug maker to save face while continuing to hike prices and a new report showcasing how drastically drug prices are contributing to the rising cost burden of health care.

On Tuesday, the Health Care Cost Institute released its report on health care cost and utilization trends between 2012 and 2016. The main finding: Americans are spending more than ever on health care, and the spike is in large part driven by rising prescription drug prices:

"Prescription drugs had the highest cumulative spending growth (27%) of any service category during the study period...

"Spending on brand prescription drugs increased from 2012 to 2016 due to considerable price increases, despite decreases in utilization of every class of drug...

"Between 2012 and 2016, the price of brand prescription drugs increased 110 percent, while the number of filled days declined by 38 percent. The cumulative increases in price of brand prescription drug classes are among the highest observed during the study period."

Read the full report here.

STAT: At $850,000, price for new childhood blindness gene therapy four times too high, analysis says

"The $850,000 list price for a new medicine that treats a genetic form of childhood blindness is about four times too high for the value the drug provides, a nonprofit that studies the cost-effectiveness of new drugs [ICER] said Friday, though it added that the price of the drug is cost-effective for select patients and with certain assumptions...

"In its report, ICER said a cost-effective price for Luxturna would be $153,000 to $217,000 - a discount of 75 percent or more."

Read more here.

Bloomberg: How Allergan Continues to Make Drug Prices Insane

"In recent years... most price hikes have been in the single digits; they averaged 7.2 percent in 2017, for instance. That's a whole lot better than a 20 percent rise. Still, even these smaller price hikes mean that many patients are being gouged.

"Take, for instance, AbbVie Inc.'s rheumatoid arthritis drug Humira. According to Forbes, it can cost up to $50,000 a year per patient. It is also the best-selling prescription drug in the world, with some $12.7 billion in annual U.S. sales. For 2018, AbbVie has raised the price of Humira by 9.7 percent. But as the Wells Fargo analyst David Maris pointed out in an email to clients, not only does this latest price hike mean that Humira's price has doubled in five years, it 'also represents an added $1.2 billion to the health-care system.'"