A new analysis done for Bloomberg news shows the cost of brand name drugs have surged since 2007, with prices doubling in many cases.
Some relatively commonly used drugs now cost $100,000 or more per year, and there is speculation that a $1 million a year drug is not far off.
The report comes as major pharmaceutical companies announce plans to merge, which may send drug prices higher.
“In general, concentration has been shown to lead to higher prices in most industries,” health care economist Robert Camp told Bloomberg. “That’s just basic economics.”
Among the surprising findings: the price of drug that has long been on the market generally rises when it faces competition from a new rival drug with a higher price.
Drug companies have long justified the price of drugs by saying they need to recoup very extensive research and development costs.
Bloomberg News’ Shannon Pettypiece tells Here & Now that argument has become harder to justify as profits rise into the tens of billions of dollars.
Others critics point out that consumers in other developed countries pay far lower prices for the same drugs.