The desire to reduce healthcare costs may have finally reached critical mass with the latest drug price hikes, prompting a U.S. Senate panel to launch an investigation regarding the ethicality of such increases. The Senate panel’s actions come after several recent drug acquisitions resulted in an exponential increase in prices, including the 5000 percent price increase of Turing’s Daraprim, a toxoplasmosis drug, and the 600 percent price increase of Valeant’s Nitropress, a blood pressure treatment. By initiating a drug pricing task force, the panel hopes to push for new legislation regulating the price of pharmaceuticals.
While the American public has criticized price increases as unconscionable, drug manufacturers argue that the price increases reflect the drugs’ true market value. The current cost of bringing a drug to the market hovers in the billions of dollars over a period of approximately 14 years, reflecting a drug development process riddled with inefficiency, rising costs, and a high risk of failure. According to one study, only 11.8 percent of drugs receive regulatory approval after clinical testing, a figure that is half the rate of drug approvals in the 1990s. Others attribute the rising prices to patent cliffs—the expiration of patents for breakthrough drugs developed in the pharmaceutical Golden Age—as well as to increased regulatory measures set forth by a more risk-averse FDA.