Generic Drug Prices Have Jumped 1,000 Percent And Lawmakers Want Answers


Within the last year, the prices of generic prescription drugs have increased by 1,000 percent, and some federal officials want manufacturers to explain the significant jump in costs.

Rep. Elijah Cummings (D-MD) and Sen. Bernard Sanders (I-VT) recently started their search for answers by sending letters to more than a dozen producers of 10 generic drugs — some of whom expressed a willingness to cooperate — after receiving complaints from constituents and pharmacists about the rising cost of generic medication. Earlier this week, the two lawmakers issued calls for a more widespread congressional investigation.

“The first thing we need to understand is why these drug companies are raising their prices so dramatically in such a short period of time, which is why we asked for information about the costs to produce these drugs compared to the prices they are now charging,” Cummings, a ranking member of the House Committee on Oversight and Government, told the New York Times earlier this week. “Once we receive that information, we will be in a better position to evaluate the root causes of these massive increases and, if necessary, consider reforms.”

Producers of generic medications don’t have to pay as high of costs — which include research, development, and marketing — as their name brand counterparts. That typically makes them cheaper. According to the Generic Pharmaceutical Association, generic drugs have generated more than $1.2 trillion in savings in the last decade.


But that may not last long. Prescription drug claims processing company Express Scripts recently reported that cost savings for generic medications slowed down from 30 percent in January to 14 percent last month. Recent surveys of pharmacists have found that they now paying more to stock their stories with generic drugs.

While it’s not exactly clear why the prices increased sharply, some people point to the host of mergers between drug companies as a potential culprit. Experts say those deals often have the potential to reduce the number of manufacturers for a specific type of generic drug to just one, which lowers the competition in the field. Generic drug manufacturers also have to develop more complex methods of delivery for their products — including injection and transdermal patches — a method that also drives up prices.

The high cost of drugs leads some American patients to make potentially life-threatening decisions. One in five Americans ask their doctor to prescribe cheaper medication to help lower their out-of-pocket prescription costs, and poor patients may opt out of purchasing their medication altogether in order to meet other financial obligations, some experts say.

According to a 2013 report, a failure to follow a drug regimen places strain on the medical infrastructure totaling billions of dollars, due in part to the additional medical care that people end up requiring. But nearly 25 percent of uninsured people didn’t take their medication as prescribed in 2011, perhaps because they were attempting to make their expensive pills last longer.

Generic drugs are especially important resources for patients because Big Pharma works to keep the prices high for their brand-name medications. Powerful pharmaceutical companies often force generic drug manufacturers to delay the release of their product into the market, while brand name drug manufacturers rake up the profits from Americans in desperate need of their medication.


That’s why Rep. Cummings and Sen. Sanders said they want to get to the bottom of the generic medications’ price increases. The two lawmakers said they expect the 14 companies who received their inquiry last week to respond by Oct. 23. The answers they receive will determine the next course of action, which will most likely include a congressional hearing.

“Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs,” Sanders told the New York Times. “We’ve got to get to the bottom of these enormous price increases.”

Unfortunately, expensive drugs aren’t the only health cost affecting patients. Medical debt in the United States totals more than $21 billion, more than that of bank and credit card debt combined, according to a study released by consumer assistance agency NerdWallet earlier this week.