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Pharma companies increased drug prices by nearly double during shortage

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  • Drug shortages
    are a constant worry for the US healthcare
    system. 
  • Researchers looked at prices of drugs under shortage from
    2015 to 2016 and found that manufacturers increased their prices

    almost double
    the expected rate in absence of a shortage.
  • Though no clear reasoning was found behind the price
    increases, researchers suspect that manufacturers
    opportunistically priced these drugs due to high demand. 

Drug shortages are a constant problem burdening the US healthcare
system. 


Earlier this year
, hospitals starting running out of
epidurals, typically administered to women when they give birth.
That’s adding to the aftermath of last year’s Hurricane Maria,
which disrupted the supply of saline and other intravenous
fluids. 

A
new study
published by researchers from the University of
Pittsburgh School of Pharmacy, UPMC Health Plan and Harvard
Medical School in Annals of Internal Medicine found that on
average the prices of drugs increased more than twice their usual
rate. 

No clear reasoning was found behind why the prices increased so
drastically, but researchers suspect that manufacturers were
exploiting shortages to charge more for drugs in high
demand. The study also found that that prices rose even
faster for drugs where there was less competition.

To conduct the study, researchers looked a prices for 917 drugs
under shortage between 2015 and 2016 using the FDA’s shortage
database.

Prescription drug shortages can cause health systems to use less
effective drugs as substitutions or reduce doses and reserve
supply for only those in emergent need. They can rack up an
estimated $230 million in additional costs each year, according
to the study. This includes the rising prices of drugs under
shortage and the higher costs of alternatives. 

Dr. William Shrank, an author on the study, said there was no
obvious rationale behind the price hikes. Unless there are
serious issues with the material or production facility that
requires higher costs, Shrank thinks that there should be a cap
to control the pricing on these drugs. 

“It’s really a central, if not the central, public healthcare
policy that we’re dealing with today,” he said. “The price of
drugs is rising faster than all other sectors of the healthcare
economy, and we’re spending more on drugs than we are on hospital
care. It’s a bipartisan issue that we’re all looking to address
and tackle.”

The issue of high drug prices has been at the center of the
Trump Administration’s healthcare agenda, ever since President
Donald Trump said last year that pharmaceutical companies are
“getting away with murder” in terms of what they charge for
medicine. The administration
laid out a blueprint
in May specifically to tackle drug
pricing. 

See also:


Business Insider Intelligence Exclusive FREE Report: The 5 Ways AI Will Change U.S. Healthcare


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