There are several perplexing circumstances pushing the cost of healthcare further into the stratosphere.  However, one entity in particular has a notable historic record of being incredulously bold in taking advantage of the greatest number of those most in need, for decades.  Pharmaceutical manufacturers are taking liberties to make billions at the expense of creating outrageous financial hardship and jeopardizing the health of millions of people.  Following a blog of several weeks ago, I have continued to share in discussions, with many providers and patients, of how devastating the impact from price fixing by several pharmaceutical companies is.

More patients are going without their medications, requiring unnecessary office and emergency department visits and hospital admissions because they can’t afford or get their medications, like insulin. At the New England AMA gathering two weeks ago in Woodstock, VT, there was a brief diatribe as to whether Big Pharma was guilty of price fixing and violating antitrust laws.  Scratch the surface by reviewing past business practices and current state, and it’s not that complicated to realize the grand scale illegality of price fixing and shadow pricing without any accountable reconciliation.  It is the same wine in a different bottle, but now even worse.  Inflated prices, cost shifting and circuitous rhetoric supporting the argument that super high pharmaceutical pricing justifies the R&D to bring wonder drugs to market, is invalidated by the exponentially large profit margins made by pharmaceutical manufacturers.  It is cruelty put upon those who have no recourse and are made to suffer while hundred and thousandfold increases for longstanding medications do not get more than raised eyebrows and head scratching.  There should be a timely market fix on several levels that would make some drug manufacturers and insurers nervous for not only class action suits, but criminal allegations. 

A single professional, working mother, recounted the devastation she and her family have recently encountered.  She had to go without two medications, taken consistently for ten years, that have been unaffordable for the past six months due to sudden price increases from several hundred dollars to thousands of dollars a month for an antihypertensive and maintenance medication for her multiple sclerosis.  Her entire existence and future have been crushed.  As a result, she has had to give up a long term solid income position.  She has become completely dependent upon government assistance, along with requiring more hospital admissions in less than one year than she’s had in her lifetime. Her two children have had tremendously challenging conditions put upon them, where they will not likely be able to return to their daily routines anytime in the near horizon.

There have been landmark events and precedent cases that have made changes over the years.  This is super easy to research online and creates hope that the future will be different. However, this is not the case.  It is ridiculous that similar cycles, with more fury, can recur only a few years after landmark cases were resolved.  “First-generation DMTs [disease modifying therapy, such as drugs treating multiple sclerosis] originally costing $8,000 to $11,000, now cost about $60,000 per year. Costs for these agents have increased annually at rates 5 to 7 times higher than prescription drug inflation.”  The cost of multiple sclerosis drugs in the US & the pharmaceutical industry.  Too big to fail? Neurology 10; May 18, 2015. The US prices for DMTs have skyrocketed beyond costs in all other countries.  Those who offer counterpoint in the name of a free market economy, in comparison to those countries with at least some formalized national healthcare, that provide transparency to the actual costs of drugs, preventing shadow pricing, just can’t explain away the added costs to the system or the tragic outcomes for thousands of people and their families. Getting medications at a fair and reasonable rate from drug companies, or insurance companies for that matter, is like playing poker against dealers who see all the cards while the opponent, or in this case the patient, is clueless.  You never know whether they have two of a kind or a full house, but you are forced into playing their game for their competition-driven profits at the expense of your health and/or life, and you can’t leave the table until you are clobbered.  Not a new soliloquy, but the competition amongst drug companies has a new more unified hum and cavalier intent in hiking up prices on meds that have been around for a really long time.  It appears as though something much more disruptive recently moved the needle, more so than most providers and patients can recall impacting some of the most affordable medications that have been off patent for years.

“It's often difficult to pinpoint the moment a revolution starts, but when it comes to the issue of drug pricing, it's quite possible that we'll look back at Dec. 6, 2013, as the day that everything changed. That was the day that Gilead’s Sovaldi was approved for sale by the FDA.  Sovaldi’s launch – and its $84,000 price tag – set off a tsunami of media attention on the issue of medication costs.”  Shadow Pricing, Highway Robbery and the Price of Drugs - The controversy over higher prices for older drugs, by Brian Overstreet; Public Health & Policy 05.26.2015Without universal regulatory oversight, drug companies are using loopholes and creating obstacles through mergers and acquisitions as well as filing frivolous suits against competitors to delay the entry of generics to the market.  Millions spent on such suits, are a drop in the bucket, offset by hundreds of millions in profits that have collateral impact on hospital pharmacy budgets.  “More pharmaceutical companies are buying drugs that they see as undervalued, then raising the prices.  It is one of a number of tactics, along with companies regularly upping the prices of their own older medicines and launching new treatments at once unheard of sums, driving up the costs of the drugs.” “Cleveland Clinic says the price hikes for the two Valeant drugs [Nitropress and Isuprel] is unexpectedly adding $8.6milliion, or 7%, to this year’s budget of roughly $122 million for medicines administered at its hospitals.”  Pharmaceutical Companies Buy Rivals’ Drugs, Then Jack Up the Prices. WSJ, April 26, 2015A multibillion dollar game of cat and mouse kept in play by the pharmaceutical companies, yet surrounded by years and years of anti-trust cases going back decades or just in the past few years.

“Actavis’ patent for the drug Nameda [Namenda] is set to expire within the next few years, but rather than keeping the treatment available until lower-cost generic versions hit the market, the company has decided to discontinue the drug altogether. The AG’s office alleges that this was done in an effort to force patients to switch to another Actavis drug, Nameda XR [Namenda XR], which is covered by a patent with many years left until expiration. Given the difficulties associated with switching medications, this move would make it nearly impossible for patients move to cheaper generic options when they become available, keeping them Actavis patients.” “A drug company manipulating vulnerable patients [with Alzheimer’s] and forcing physicians to alter treatment plans unnecessarily simply to protect corporate profits is unethical and illegal,” said Schneiderman. “Unfortunately, schemes to block competition, without considering the consequences to patients, are a growing trend in the health care industry. By standing up to Actavis, we’re sending a clear message to all pharmaceutical companies: Prioritizing profits over patients’ rights will not be tolerated.”  “The Wall Street Journal reports that an Actavis spokesman said the company believes the XR drug has "significant advantages" over the original. The spokesman declined to comment on the lawsuit.”  New York AG files anti-trust lawsuit against drug maker, by Chris Dimarco, Inside Counsel; Sept. 17, 2014

Under the guise of a free market economy, call a spade a spade, but be able to look your colleagues, friends and even more importantly your patients and families, in their eyes and be certain that you are largely truthful.  To be anywhere left of center, meaning dishonest, particularly regarding this subject matter, simply equates to failing on all levels of a career and aspects of life that one is engaged with, while negatively, intentionally, and relentlessly impacting the lives of thousands of patients, their families and the healthcare system. With hospitals and providers scrambling to transform the delivery of healthcare with much more restrictive budgets, yet focused on high quality care with positive outcomes at lower costs, it’s absolutely fantastic that price fixing and all the gymnastics being performed to support it can exist at all.

The time has come to close loopholes and obstacles for all those responsible for and in support of these aberrations in business antics that are unconscionable.  Just like so many other journalistically exploited headlines, this should be recognizable to the public, headlining companies, and their leaders on a weekly basis, with a call for universal legislation. 

Lukas Kolm, MD, MPH

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