President Donald Trump’s administration appears to have hopes that pushing the drug market to control pharmaceutical prices will help drive down costs naturally, but Elisabeth Rosenthal in a New York Times column says, with history as a reference point, that’s unlikely.
“Competition may work well to lower the prices of baguettes and cars,” Rosenthal writes. “But it has proved to have limited impact on American Health care, especially when it comes to expensive interventions like prescription drugs.”
For example, Novartis’ Gleevec, a leukemia treatment, was approved by the Food and Drug Administration in 2001, and hit the market with a $26,000 per year list price. However, some drugs in the same family today have about a $150,000 per year list, and the price of Gleevec rose with them.
“What happened is that each new entrant cost more than its predecessors, and their makers then increased their prices to match the newcomer’s,” Rosenthal writes. “The problem is that companies have decided it is not in their interest to compete.”