Dr John Bennett Discusses the Trend of Rising Drug Prices

Martin Shkreli and Turing Pharmaceuticals are not the only instance where a previously inexpensive generic drug increased in price by more than 400%, said John Bennett, MD, FACC, FACP, president and CEO of CDPHP.

Transcript (modified)

Rising drug costs have become a bigger focus in the last year, but was this a growing issue that was just ignored until now?

So I think that, for a number of years, particularly through the Great Recession, we had pharmaceutical price trends that were not that excessive. Now a lot of that was really because we moved to a lot of generic drugs and that kind of window has disappeared.

So most companies now have 85%-90% generic prescribing and what we’re seeing, coupled with the explosion of specialty drugs, what we’re seeing is that even though drugs are prescribed generically, we’re seeing that there are many classes which have only 2, maybe 3, generic drug makers, and they are uniformly increasing the prices.

We’re suddenly seeing this huge increase not only in specialty and brand-name drugs, but in generic drugs. People are suddenly acquiring these orphan drugs which were very cheap or even some regular non-orphan drugs—drugs that are used by a wide segment of the population which previously were very cheap—they are acquiring those companies cheaply and just jacking up the price.

So people have to understand for instance that, you know, everyone is familiar with Martin Shkreli who jacked up the price. We could name a hundred instances where previously very inexpensive generic drugs have gone up 400%-500% so that is not a unique circumstance. I think we’re seeing this now and that is what has kind of blossomed.