Patients Bear the Cost of Rising Drug Prices

A new, thoroughly researched article by STAT News examines how a couple of drug companies raised prices for their best-selling arthritic treatments almost perfectly in sync, and how these price hikes have harmed consumers and forced them to pay exorbitant costs.

In 2013, AbbVie increased the price of Humira, its popular biologic drug that treats arthritis and other conditions, by 6.9%-well above the rate of inflation. The very next day, the drug company Amgen increased the price of its biologic drug Enbrel (which is very similar to Humira) by the exact same amount-6.9%. And this scenario happened ten additional times between 2014 and 2018. One of the companies increased the drug's price, and the other followed suit, leaving consumers no choice but to pay more for the same medicines. The drugs have become increasingly unaffordable.

How were the companies able to do this? First, they have immense power in the drug market-Humira is the world's best selling drug, with $18.4 billion in 2017 sales, and Enbrel is the fifth best selling drug, with $8 billion in 2017 sales. For both of these drugs, about two-thirds of that revenue came from the United States. And if patients don't pay for these medicines, they often suffer incredible pain and find it hard to perform even basic everyday tasks.

Second, last year AbbVie and Amgen reached a confidential legal settlement that extends their exclusive patents in the United States. In this agreement, Amgen promised it would not selling a Humira biosimilar (a cheaper version of a biologic drug) until 2023, allowing both companies to charge high prices for their drugs without facing competition from the other company. In Europe, AbbVie does not have that exclusivity, and has to face competition from other, less expensive drugs. As a result it is now making plans to slash Humira's price in those countries by around 80%-evidence of how much this agreement allows both companies to jack up prices.

Moreover, AbbVie has reached similar agreements with six other companies that have researched and developed Humira biosimilars. In all cases, the goal was to stifle competition by blocking cheaper alternative drugs from coming to market. AbbiVie has also filed dozens of patents covering every aspect of Humira's development, in a strategy intended to stop any drugs that might compete with it.

And for patients, the price increases have been awful. One woman testified about how her insurer refused to cover Enbrel, leaving her unable to afford the drug and having to endure painful joint swelling. When she tried to get Humira, she struggled to afford the expensive copays and had to stop taking it, and then complications from her disease required her to have multiple surgeries and cost her hundreds of thousands of dollars. This could have been prevented if she had been able to access affordable biologic drugs.And a mother of two in New Hampshire detailed how Humira helps her, but rising deductibles and copays make it hard for her to afford the medicine.

There may be multiple reasons for why these drugs have become so expensive. One possibility is that drugs like Humira and Enbrel are given preferred placement on formularies, possibly because of volume based discounts. Pharmacy benefit managers (PBMs) also likely play a role.

This current state of affairs is unacceptable. Patients should have affordable access to the medicines they need, and companies should not strike agreements that harm competition and limit patient choice.