Prices of dozens of prescription drugs have doubled

NEW YORK – After Martin Shkreli raised the price of anti-parasitic drug Daraprim more than 50-fold to $750 a pill last year, he said he wasn’t alone in taking big price increases.

As it turns out, the former drug executive was right. A survey of about 3,000 brand-name prescription drugs found that prices more than doubled for 60 and at least quadrupled for 20 since December 2014.

Among the bigger increases was Alcortin A, a combination steroid and antibiotic gel to treat eczema and skin infections: The price soared 1,860 percent, or almost 20-fold, during the period. And a vial of Aloprim, a Mylan NV drug for cancer complications, more than doubled, according to the survey by DRX, a provider of price-comparison software to health plans. Drug pricing will come under scrutiny Thursday as pharmaceutical executives appear before a U.S. congressional hearing.

Even after soaring prices became an issue in the U.S. presidential campaign, the cost of many drugs has continued to rise at annual rates of more than 10 percent. Drugmakers raised the prices of products as wide-ranging as erectile dysfunction drug Viagra, heart treatments, dermatology medicine and even brands that long have lost their patents. While specialty companies have had the steepest hikes, giants such as Pfizer Inc. and GlaxoSmithKline PLC kept pushing through smaller increases.

“The data shows that price increases are an integral part of the business plan,” said Jim Yocum, executive vice president at DRX.

Pharmaceutical companies often boost prices around the end and the start of the year, and the scale of recent increases was greater than what Yocum has seen in the past few years. About 400 formulations of brand-name drugs went up at least 9.9 percent since early December, according to DRX.

Drugmakers say they offer significant discounts off list price to insurers, and inexpensive generic alternatives are available. And they say they invest large amounts in research and development to come up with breakthroughs.

Among recent increases by the world’s biggest pharmaceutical companies is AstraZeneca PLC’s blockbuster cholesterol drug Crestor, up 15 percent ahead of the arrival of a generic version in May. AstraZeneca said it decides on price changes annually based on market conditions, a common industry practice, and it offers a savings program on Crestor that reduces co-payments to as little as $3 per prescription.

Pfizer raised prices for 24 drugs by 12 percent or more in the past two months, with Viagra increasing about 13 percent and two heart drugs whose price went up 44 percent and 86 percent, according to DRX. The New York-based drugmaker said list prices don’t reflect discounts offered to the government, managed-care organizations, commercial health plans and programs that restrict any increases above the inflation rate. In the U.S. biopharmaceutical business, the average price increase was 6 percent last year, Pfizer said in an email.

Meanwhile, GlaxoSmithKline increased prices by 15 percent on 22 products over the past two months, including Lamictal XR for epilepsy, according to DRX.

“Price increases for some medicines are a reality in a competitive U.S. marketplace and we strive to handle them thoughtfully,” Glaxo said by email. After discounts, the London-based company said U.S. prices declined from 2014 to 2015.

DRX, a unit of Connecture Inc., looked at prices for more than 6,300 doses of about 3,000 brand-name drugs from December 2014 through Jan. 15. It included patented drugs as well as old brand drugs whose patents have expired, but not generics. Half the drugs got a price increase – including 1,100, almost a third, above 10 percent. Only about 50 had a decrease, DRX found.

Valeant Pharmaceuticals International Inc., which in recent months has been under fire for its pricing, was among the most aggressive, with 13 drugs that at least doubled since December 2014. That’s more than any other large company, the survey found. The heart drug Isuprel soared 720 percent over the period, including 525 percent right after Valeant bought the rights to sell it.

In a statement, Valeant said it sets prices based on factors such as the cost of development or acquisition of a drug, its benefits versus alternative treatments, and the availability of substitutes or generics. It also offers assistance programs to keep out-of-pocket costs affordable.

The scrutiny on prices is likely going to increase after Democratic presidential candidate Hillary Clinton vowed again to crack down on companies that “gouge patients with pricing” in a Jan. 28 tweet. Valeant and Turing Pharmaceuticals AG, Shkreli’s former company, are expected to testify at the hearing Thursday. Shkreli, who faces federal fraud charges unrelated to Turing, was subpoenaed to appear, although he has said he plans to invoke the Fifth Amendment, which allows people to avoid incriminating themselves.

Spending on prescription medicines isn’t growing faster than overall health care spending, partly because of the use of generics and negotiations on discounts, according to the Pharmaceutical Research and Manufacturers of America.

While insurers and health plans do negotiate discounts, the list price is usually the starting point of the negotiation with drugmakers, DRX’s Yocum said.

“Even if they don’t get all of that price increase, they will get some of it,” he said.