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Drug Prices Up as Much as 1,000 Percent

March 19, 2009

Drug companies are quietly pushing through price hikes of 100 percent, or even more than 1,000 percent, for a small but growing number of prescription drugs.

The number of brand-name drugs with increases of 100 percent or more could double compared to four years ago, according to researchers. Many of the drugs treat fairly rare, but often serious or even life-threatening, conditions.

Questcor Pharmaceuticals raised the wholesale price on Acthar, which treats spasms in babies, from about $1,650 a vial to more than $23,000. Ovation raised the cost of Cosmegen, which treats a type of tumor, from $16.79 to $593.75.

The average wholesale price of 26 brand-name drugs jumped 100 percent or more in a single cost adjustment, up from 15 in 2004.

Dr. Mercola's Comments:

In any other industry, instant price hikes of 100 percent or 1,000 percent simply would not be tolerated. But the drug companies are largely insulated from the supply-and-demand cycle that drives costs for other consumer goods.

For one thing, drug companies have the upper hand in negotiating prices. There are currently no scientific standards for analyzing the cost-effectiveness of new drugs, and this can be so widely interpreted that just about any price can be justified and consumers have no way to gauge whether the effects of a drug are worth the price.

Plus, there is very little competition for drugs sold in the United States, as Americans are warned not to get their drugs from other countries where prices are far less expensive. The FDA went so far as to tell Americans not to buy prescription drugs from Canada because they might be "contaminated by terrorists."

As a result, Americans spend 10 times the amount on drugs that people in, say, Canada do.

And though I rarely recommend drugs in the first place, the notion that you must buy them in the United States to protect yourself is false. You can save up to 50 percent off the cost of drugs by purchasing them through foreign pharmacies like the ones in Canada, and you can search for these pharmacies using the Internet.

Can You Say “Extortion”?

Getting back to the issue of huge price increases, and how the drug companies can get away with it, I think extortion is a very good way to describe it.

If patients want access to "life-sustaining" therapies, they'll be forced to pay the price, which in many cases means emptying their bank accounts, even if the drug is useless.

Take Avastin, a drug used to treat advanced lung, colon and breast cancers. It costs about $100,000 a year (no wonder it brought in sales of nearly $3.5 billion in 2007), yet prolongs life by only a few months, if that. And newer studies are showing that it may not be as effective against cancer as initially thought.

Yet, for the hope of living just a little bit longer, people are shelling out their life savings to drug companies that are only interested in one thing: making more profits.

Even with insurance coverage, co-payments for a drug like Avastin could easily run as high as $20,000 a year, making the drug essentially unavailable to many cancer patients.

Usually, drug makers justify high prices by pointing to the costs of research. But Genentech, the drug’s maker, is instead arguing that life-saving drugs are inherently valuable, and should therefore be appropriately costly.

Similarly, Acthar, a drug to treat spasms in babies, costs more than $23,000 a vial, up over 1,300 percent from its previous price, and completely cost prohibitive for many families. This is particularly appalling as there are so many inexpensive and highly effective natural strategies to treat this problem.

While the biggest price gouges in drug prices are often for those used to treat more rare disorders, commonly used drugs are also going up in price.

Prices for the 122 drugs most commonly prescribed rose nearly 14 percent between 2004 and 2007, a rate much higher than that of inflation, according to Psychiatric News.

And prices rose over 7 percent on average for 1,344 brand-name drugs in 2007, according to Express Scripts. So across the board, if you’re taking medications there’s a good chance you’re paying more now than you were a couple of years ago.

Drug Pricing Has Nothing to Do With Costs

Please don’t fall for the drug companies' marketing hype that drug costs are rising to cover their extensive research and development phase.

Their prices are negotiated in secret and the outcome is based largely on the bargaining power of a particular country or health plan. This means that when drugs are sold to consumers, there is not usually one set price. Prices vary from very low to very high and the price you are charged depends on a number of factors, including the country in which you reside and whether or not you have health insurance.

Americans without health insurance, who are often in low-income brackets, are often charged the most.

And, because businesses must dedicate ever-increasing amounts of their finances to rising insurance costs driven in large part by pharmaceuticals’ exorbitant prices, it affects our economy -- and you -- at nearly every turn.

My Top Tips for Avoiding Drug Company Price-Gouging

Most of you know that I rarely recommend pharmaceuticals, and in fact my mission is to transform the existing medical paradigm from one addicted to pharmaceuticals, surgeries and other methods that only conceal or remove specific symptoms -- with morbid results to our health and economy -- to one focused on treating and preventing the underlying causes.

With that in mind, I urge you to take charge of your own health now instead of handing it over to the drug companies.

Once and for all, commit to adopting a diet that is truly healthy for you, and to optimizing your emotional health. These two factors -- the foods you put into your body and your emotional well-being -- have absolutely everything to do with building your immune system so you can prevent disease and premature aging and optimize your weight so you can avoid unnecessary pharmaceuticals.

So please, let’s all take a giant step back and get away from the flawed notion that drugs are going to make you healthy. Parents, you can help to create a healthier next generation by teaching your children that adhering to basic health principles will help their bodies to heal themselves, and live your life according to these tenets as well.