Price increases - tone deaf or defiant?

Defying the laws of nature, many drug companies seem intent on proving that what goes up doesn’t have to come down. For them, the sky’s the limit when it comes to U.S. drug prices.

Despite all the public outrage and all the talk and threats on Capitol Hill, several drug companies ushered in the second half of 2018 with more price increases. Most of them were “modest” ­ in the single-digit range. But when piled on top of previous hikes, those modest increases add up to skyrocketing prices.

Take Seattle Genetics Inc.’s cancer drug Adcetris (brentuximab vedotin). Its wholesale acquisition cost (WAC) just went up 3.9 percent to $7,375. The drug debuted in 2011 with a $4,500 WAC. Ten months after hitting the market, the drug got a 3.5 percent price increase. Since December 2012, Adcetris has had two price hikes every year, each at 3.9 percent, Suntrust Robinson Humphrey analyst Yatin Suneja noted.

Such price hikes are not playing well in Washington, as they’re evidence that President Donald Trump’s promise in May that major drug companies would be announcing massive price drops within two weeks was nothing more than wishful thinking.

The same goes for lawmakers’ hopes that all their threats to allow importation and direct Medicare negotiations would finally wake the prescription drug industry up to the fact that it can no longer do business as usual when it comes to drug prices.

Part of the problem is that the public – and Congress – has been complaining about high drug prices for decades. It’s become a broken record that’s easy to tune out. But with some drugs now costing more than a McMansion, the public complaints, congressional threats and presidential Twitter attacks could grow legs.

With that in mind, it would behoove drug companies to expand the idea of patient-focused drug development to patient-focused pricing. That would entail actually listening to patients and understanding where they’re coming from.

As patients, we begrudge having to spend exorbitant amounts of money on something as basic as living. Sure, we have to buy food to survive and pay the rent or mortgage. But we have a range of choices in all of that. We can even grow our own food and build a “tiny” house if we want to keep the costs down.

We also have a sense of outrage at any company or multimillionaire CEO cashing in on our misery, especially when we’ve funded the basic research that ultimately resulted in a drug that’s costing us more than the house that will shelter our entire family for years. Although they may be a necessity, drugs that cost tens or hundreds of thousands of dollars are a luxury for people living on welfare wages.

We’re often told that prices are based on what the market will bear. It’s fine to do that with a souped-up car or designer clothes and jewelry. We don’t have to buy them. And, again, we have other, cheaper, choices. But pricing drugs at the top of what the market will bear when there are no alternatives is like taking patients hostage and literally holding lives for ransom.

One solution being touted by some policymakers, payers and drug companies is pricing drugs based on what a life is worth and the savings the “system” realizes through fewer hospitalizations and complications, as well as increased productivity.

By that reasoning, things like life vests, smoke alarms, fire extinguishers and airbags should have six-figure price tags. And can you imagine the maker of a life vest charging boaters tens of thousands of dollars more after the vest did what it was supposed to do and saved their lives?

Drug companies often complain about the “unintended consequences” of congressional actions and the weight of regulatory burden. The truth is their pricing policies that put life-saving drugs out of reach of too many Americans are having deadly unintended consequences and are burdening U.S. families with mountains of debt.