Drug companies are price gouging again

The American people have spoken loudly, demanding the government stop implementing policies that drive up the prices of goods and services. Voters feel the pain of inflation every time they fill their gas tanks, put food in their shopping carts, or pay their heating and air conditioning bills. However, the large pharmaceutical companies seemingly didn’t get the memo and are, once again, raising prices.

A few days before Donald Trump was sworn in, major pharmaceutical companies announced a round of price increases for critical drugs. The price of at least 250 diabetes, cancer and other essential medications will increase, further putting those who need these lifesaving drugs in a financial hole. These actions confirm the results of a recent survey in which a majority of Americans believe prescription drug prices are too high and that drug company profits are a major contributor.

This shouldn’t come as a shock. AARP, America’s largest senior organization, recently released a new analysis of the prescription drug market, finding that “the 25 brand drugs with the most Medicare Part D spending … have had their list prices increase an average of 98 percent over their lifetime.” In other words, Americans can expect the price of the prescription drugs they use most frequently to double over their lifetimes.

The kicker is that these price increases came even with significant pricing help from pharmacy benefit managers, the groups that businesses hire to negotiate with the drug companies and pressure them to reduce their costs. Impressively, PBMs have managed to lower the cost of Medicare Part D spending by 20 percent in some years. Still, even with PBMs’ assistance, drug prices will double in most Americans’ lifetimes. Talk about a racket.