Pharmaceutical Companies Hike Prices in the Face of Criticisms

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In the United States, prices of branded drugs have increased to the disappointment of the government and public. However, the pharmaceutical companies plainly demonstrates their pricing power despite of the said criticisms thrown at them.

The Wall Street Journal (WSJ) reports that in recent years, it is common for these drug companies to boost their prices. It is now a hot topic and relevant to political pressure as well.

In connection to this, WSJ notes that dozens of branded medicines have been raised since late December 2015. These increases are between 9 percent and 10 percent as analyzed by equity analysts. These increases are on list prices on top of the already expensive drugs before any rebates and discounts are sometimes provided by manufacturers to insurers and other payers, not to mention that these drugs have already increased repeatedly these recent years.

Therefore, according to WSJ, healthcare payers, doctors, politicians, and patients have expressed their thoughts in drug pricing in recent months in which the drugs are sometimes out of reach for many straining healtcare budgets and patients. The U.S.' expense on prescription drug has risen to 12.2 percent in 2014, which accelerated from 2.4 percent growth in the year 2013, as noted Centers for Medicare and Medicaid Services in December.

WSJ reports also that presidential candidates like Bernie Sanders, Marco Rubio, and Hillary Clinton have criticized the prices of the medicines and proposed some measures to control the price hikes. However, with the current price hikes, the manufacturers still show their pricing power that is beyond the control of the government and the public alike.

"Unlike other countries, there's no mechanism whereby regulatory authorities can control price," a Jefferies analyst, David Steinberg, has said in an interview. He also adds that discounts and rebates will likely offset some of the latest price hikes. However, pharmaceutical companies will typically don't announce the magnitude of such agreements.

Moreover, according to MSN. com, Vanda Pharmaceuticals Inc., Pfizer Inc, Amgen Inc., Allergan PLC, and Horizon Pharma PLC have respectively increased their drug prices either in December or Jan. 1, New Year's Day.

To cite, Vanda Pharmaceuticals Inc. raised its new drug called Hetlioz that treats blind people's sleeping disorder with 10 percent, meaning $148,000 annually, its spokeswoman revealed. This once-a-day capsule is 76 percent higher than when it debuted in the market in 2014. She has said that the size of population for the treatment is within the price range, which is noted to have fewer than a thousand patients that are currently taking the drug in the U.S.

Additionally, Pfizer has also raised its branded products' prices to at least 20 percent on New Year's Day. Meanwhile, Amgen raised its anti-inflammatory medicine called Enbrel by 8 percent in December, Allergan takes price hike at the average of 9.1 percent, and lastly, Horizon Pharma boosted its prices at the range of 9 to 9.9 percent.

Fox News also reports that these pharmaceutical companies provide financial assistance to patients to be able to afford the drugs by hiking up prices as a key to continue their business.