After his sarcastic dismissal of Fox News’ Peter Doocy on Monday, it’s clear that President Joe Biden is not terribly worried about inflation.
Yesterday I said that the perception of the Biden Administration’s wrongheadedness is an issue for 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 announced that price increases will be made on the most commonly prescribed drugs in America.
Pfizer and Gilead Sciences are major drug companies. They announced an increase in prices for 460 drugs by an average 5-6 percent. These price increases will also include HIV drugs Biktarvy and Ibrance for breast cancer, heart failure, Vyndamax for heart disease, as well as Oxycontin, a controversial painkiller. Prices for all of these drugs could rise by as high as 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. Price hikes were not as common before. 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. Humira sales alone were the reason AbbVie earned $16 million in 2020. 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 works hard to reduce any discount on drugs at the back end. They are targeting figures such as former President Trump, who made drug prices a major issue during his 2016 campaign, and later administration, or trying to abolish or curtail the drug discount program 340B.
We are referring to AbbVie or Humira as the subject.
AbbVie has announced recently that discounts for Humira will be restricted to rural hospitals, clinics, and communities in low-income, often reddened, areas. This, just like pre-inflationary price rises, is about filling 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.
Trump signed several executive orders to reduce prescription drug prices. He also set ceiling prices for certain drugs that AbbVie, a provider of pharmaceuticals, agreed to offer at a discounted price in some instances. This was done as a swap to get access to entitlement monies. Big Pharma lobbying for the expansion of Medicare Part D, and Obamacare.
Biden is facing a major red wave in 2022. Higher drug prices will only further drag down his already low approval ratings, and place his faltering administration under more pressure. Americans have a real problem with inflation. Drug prices are an important part of it. Biden does not have a plan.
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