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CMW News: Drug companies dramatically raise prescription drug prices

Case Management Weekly, August 13, 2008

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Imagine your baby needs medication to control a condition that causes spasms. Now imagine that the price of this medication is more than $23,000.

The cost of the drug Acthar, which is made by Questcor and controls infantile spasms, increased this year from $1,650 to $23,269—a 1,310% jump.

Already this year, the wholesale price of 16 other drugs has increased by 100% or more. Last year, 26 drugs saw the same increase, and in 2004, 15 drugs were increased to this degree, according to a recent study done by researchers from the University of Minnesota. Some drug prices are increasing by as much as 3,400%, the researchers say.

Balancing the rising costs of these medications affects the entire healthcare system. Some of the drugs are administered in hospitals, leaving the facilities to either eat the cost or bill insurance companies, which in turn raise premiums. Insured consumers sometimes pay a flat co-pay of around $20 and other times, a percentage of the total price of the drug, which can be costly.

Drug companies argue they need to increase prices to stay viable in the market, and that medication, even when expensive, is often more reasonable than other treatments such as surgery.

Source: USA Today

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