By Antoinette Kraus
Prescription drug pricing is reaching a crisis point.
A 2018 study showed that between 2012 and 2017, the cost of prescription drugs under Medicare increased nearly 10 times faster than the rate of inflation. And it continues to rise; the prices of more than 400 prescription drugs have already increased by an average of 5% in 2020.
Americans are now spending more than double what we paid for our medications in the 1990s and much more than other developed nations. Annual spending on prescription drugs now exceeds $450 billion and is rapidly becoming one of the biggest cost drivers in our health-care system.
Meanwhile, while patients struggle to pay for their medicines, drug corporations are raking in profits. Between 2006 and 2015, 67% of drug companies increased their annual profit margins, some up to 20%. And their claims that drug prices are driven by innovation simply don’t add up; drug corporations routinely spend more than double their research and development budgets on advertising.