Generic Drug Makers Under Fire From Congress Over Skyrocketing Prices

Posted on October 9, 2014

The cost of generic prescription medications has been soaring in the past year. Because approximately 86% of all drugs dispensed today are generics rather than name brands, the rising cost of generic medications is making needed medicines out of reach for many Americans and putting independent pharmacies at risk of going out of business.

Commonly prescribed drugs such as blood pressure medicine Captopril have had increases in costs of more than 1000% between November, 2013, and April, 2014. The wholesale costs of generics that drug manufacturers charge pharmacies have skyrocketed. These costs are being passed on to consumers with devastating results.

The National Community Pharmacists Association did a survey which said that 77% of pharmacists reported "26 or more instances over the past six months of a large upswing in a generic drug’s acquisition price." Pharmacists also reported that they are seeing many patients decline to purchase their medications because the co-pays are too high for them to afford. The Association is so upset about what is happening with generic drugs that it wrote Congress demanding that something be done about the rising costs of medications. The drugs that have huge price hikes are old drugs that have been on the market for decades.

Now, finally, someone in Congress is actually listening. Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and Senator Bernard Sanders, Chairman of the Subcommittee on Primary Health and Aging, Senate Committee on Health, Education, Labor and Pensions, are taking aim against pharmaceutical companies that overcharge Americans for commonly used drugs.

The duo has sent letters to 14 major pharmaceutical companies demanding an explanation for the outrageous price increases. The letters demand production of a vast array of information, including costs to make the drugs, what they sell the drugs for now, what they charge Europeans versus what they charge Americans for the same drugs, and the names of the persons responsible for deciding to jack up the cost of drugs thousands of percent.

The letters target ten commonly prescribed drugs that have had outrageous price hikes. The representative drugs they have asked for information on include doxycycline, an antibiotic that has been in use for decades, which has gone from $20 a bottle for 500 pills in October 2013 to $1,849 a bottle in April, 2014. Other drugs listed in the request include pravastatin, which lowers cholesterol, digoxin, a widely used, crucial drug for millions of cardiac patients which has been around for literally hundreds of years, and albuterol tablets, an asthma medication. The price of Digoxin has increased 884%. The price of the migraine and anti-seizure medicine Divalproex Sodium ER has increased 736% for a bottle of 80, 500 mg extended release tablets. You can see the chart of the medicines released by Sanders and Cummings here.

According to a study by Pembroke Consulting the increases are staggering. For example, from July 2013 to July 2014 Captopril 50 mg tablets went from a National Average Drug Acquisition Cost ("NADC") by pharmacies of 3 cents a tablet to $1.31 a tablet. That's an increase of 3,806%. Captropril is taken by millions of people to control blood pressure. It is a very old, safe drug. There is no shortage or other reason to explain the increase. During the same time period the NADAC cost for the antibiotic tetracycline 500 mg capsule increased a whopping 17,714%. Tetracycline is another very old drug. It's not some cutting-edge treatment that a company recently spent millions to create.

Senator Sanders said in a statement, "It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs. Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs. We've got to get to the bottom of these enormous price increases." Rep. Cummings said, "When you see how much the prices of these drugs have increased just over the past year, it’s staggering, and we want to know why."

Pharmaceutical companies lobby both Republicans and Democrats and they have very deep pockets, which is why the proposal to allow Americans to import cheaper prescription drugs from Canada eventually failed, despite widespread support from Americans. We hope politicians from both parties will get on board with changing the fact that Americans pay the highest prescription drug costs in the world. We subsidize cheap drugs prices in Europe. That needs to stop.

Consumers are very unhappy and alarmed about the rise in prescription drug costs and they are telling their representatives in Congress. Sanders and Cummings have asked for this information and have indicated that regulation could be next if the situation cannot be resolved. The information is due to be turned over by October 23rd, which is a short timetable.

If Cummings and Sanders are not satisfied with the information provided by the drug companies (and they won't be), next will be televised hearings with executives put on the spot to discuss the price increases. After that we look forward to seeing Americans tell their stories about not being able to buy asthma drugs for their children or heart medications because they are too expensive. Maybe then things will change for the better.


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