Drug Prices Go Up

A recent report by AARP which is talked about on the WSJ Health Blog reveals the following:

“Last year, the wholesale price of specialty drugs rose 8.7%, three times the rate of inflation. The price of non-specialty, branded drugs rose 7.4%, while the price of generic drugs fell by 9.6%.”

Are we surprised?  Generics have tons of competition so prices will go down over time unless they get too low and people jump out of the market.  Brand drug utilization keeps going down so they are going to raise prices.  And, specialty drugs have a limited market so their prices are going to continue to go up.

Is this right?  I could debate this forever.  But, it is a free market.  This is what happens with supply and demand.  We all want the drugs to extend our lives and make us feel better even when we have chronic illnesses.  But, it isn’t cheap to do research and trial and error to find out what works (at least it’s not cheap without testing on humans in an uncontrolled environment…which I don’t think we want).

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