After his sarcastic dismissal of Fox News’ Peter Doocy on Monday, it’s clear that President Joe Biden is not terribly worried about inflation.
As I mentioned yesterday, the perceived (whether rightly or wrongly) nature of the Biden administration is a big drag on the rest of the party. He could be doing more across the board – at the gas pump, the grocery store, on every new and used car lot – and it looks like you may see some price hikes coming for the drug stores next. Big Pharma has announced price hikes on some of the most popular and most prescribed medications in America.
Major drug makers like Gilead Sciences, Pfizer, and Purdue announced that they are raising prices on 460 medications by an average of 5 to 6 percent. As well, these price hikes will include drugs like the HIV drug Biktarvy, breast-cancer drug Ibrance, the heart-failure drug Vyndamax, and even the controversial painkiller Oxycontin. All those will see price increases of up to 7 percent.
This year the increases are more or less in line with the 6.8 percent inflation everyone felt at the pump and the checkout counter last year, but a bunch of last year’s price hikes were not. And nor were price hikes before that. A report from the Institute for Clinical and Economic Review (ICER) found that in 2020, drug makers did the same thing, raising prices and costing American consumers an additional $1.67 billion at the pharmacy counter.
The companies in question say they’re doing this not just because their costs are going up (the reason every other business out there says they’re raising prices), but to fund research into new medications.
“The modest increase is necessary to support investments that allow us to continue to discover new medicines and deliver those breakthroughs to the patients who need them,” a Pfizer spokesperson said, according to Axios.
That sounds nice, but first of all, it’s not really how normal companies finance R&D (often they’ll raise more capital, or borrow it, or take the money out of existing line items).
Second, it is at odds with AbbVie – a drugmaker that has notably attracted the attention of Congress and which makes anti-inflammatory drug Humira – whacked patients with a 7.4 percent price increase when the overall economy was experiencing less than 2 percent inflation. And their explanation wasn’t inflation (obviously) or R&D. Rather, they suggested it was to make up income they’d lost because of less drug usage during the first year of COVID. Previously, AbbVie had raised the price of Humira alone 470 percent since 2003.
Was that for R&D?
Nope. Its CEO’s bonus is tied directly to the sales of Humira, which also happens to be the highest-selling medication in America. AbbVie made $16 billion in 2020 from Humira alone. R&D makes a useful talking point, as does inflation.
But the truth is there’s more going on here. And the bottom line is, R&D efforts or inflation or not, the consumer always ends up paying more. Big Pharma is hard at work to limit any discounts on drugs on the back end, too, by going after figures like former President Trump who made drug pricing a big issue in his 2016 campaign and subsequent administration or trying to eliminate or curtail the 340B drug discount program.
The subject of which brings us right back to AbbVie and Humira.
Recently, AbbVie announced that it would restrict discounts on drugs like Humira to rural hospitals and clinics in working-class, frequently dark red communities under the aforementioned drug discount program. That, like the pre-inflation price spikes, is just about filling up the bank account.
They will claim they’ll be less interested in restricting discounted sales if only providers will hand over patient claims data, which AbbVie wants so it can argue that it doesn’t have to give the discounts in the first place but also would probably force providers into violating federal privacy law. That’s a neat trick if you’re AbbVie. If you actually use the drug, and especially if you’re uninsured, it’s also a pricey one that basically leaves you with only GoodRx as a solution.
With drug prices set to add to Americans’ inflation woes President Biden’s only plan seems to be vague threats to hit meat producers with antitrust lawsuits and to keep trying to pursue a BBB bill that is flawed, and also probably dead.
President Trump made reducing prescription drug prices a key initiative of his administration, signing several executive orders and doing things like setting ceiling prices for drugs providers like AbbVie agreed to make available at a discount in certain instances as a sort of swap for getting access to entitlement monies, which they Big Pharma has lobbied to expand Medicare Part D and Obamacare.
As Biden stares down a red wave in 2022, higher drug prices are sure to further drag down his already plummeting approval ratings and put his faltering administration in even more jeopardy. Inflation is a very real concern for Americans, drug prices are a part of that and Biden is a man without a plan.