9 On Your Side Investigates
Drug costs soar, drug companies get richer
Reporter: Tammy Vo
TUCSON (KGUN9-TV) - An order put out by the Food and Drug Administration could push the price of what's in your medicine cabinet way up, fattening the pockets of some drug companies. That could have a big impact on at least half of the American population which consumes prescription pills and even more people who take over-the-counter medications.
"Being diabetic and having heart bypass surgery, I take a lot of medications" said Frank McPherson. McPherson says that his eight medications are reasonably priced right now, but he would be worried if the prices went up.
Tucson resident, Jim, has also battled drug prices and said "Unfortunately the Food and Drug Administration has been in the pockets of pharmaceutical companies for years. The potential is very disastrous".
Keith Boesen, Director of the Arizona Poison and Drug Information Center, shows KGUN 9 what could be on the horizon. Recently, the FDA decided that some really old drugs needed to be FDA approved to make sure that they're safe and effective.
"So, there are certain drugs that were considered 'grandfathered in' as far as the FDA was concerned, but they're starting to crack down on some of these medications that they've never approved" explained Boesen. Like Colchicine, used to treat gout. The medication is so old, Ben Franklin even used it back in his day. Recently the FDA put it on its list of drugs that need approval. A company called URL Pharma got it approved, giving them the exclusive right to sell it. Reports show that URL Pharma also raised the price from around $.04 per pill to $5. The FDA ordered compounding pharmacies across the nation to stop making it, and that includes Reeds in Tucson. Pharmacist Dana Reed-Kane says that she would've paid around $10 for 100 pills prior to the FDA approval. Now, she would pay around $490.
"Can you justify this cost in any way?" asked reporter Tammy Vo.
"The only reason why we raise costs is if our ingredient cost goes up but it never goes up this much. It's ridiculous" answered Reed-Kane.
When it comes to drug company price jacking, Makena takes the cake. The drug prevents early childbirth. It used to cost $8 per shot until KV Pharmaceutical initially jacked up the price to $1,500 per dose. Turns out, it isn't just specialty drugs that are on the FDA's list, it's over the counter stuff too.
"The public is going to be upset about the price increase. If they paid so much for their cough and cold symptoms one year and it went up the next year, that's going to upset them" said Boesen. For example, pseudophedrine which is found in nasal decongestants is on the FDA's list. Right now, a pack could cost around $5, but could go up to an estimated $20 per pack for some versions of the drug, say pharmacists.
Who keeps these drug companies in check? The FDA says that it doesn't control pricing. Turns out, there are no laws in place capping exorbitant prices. But Senator Sherrod Brown of Ohio recently sent several letters to drug companies, demanding that they drop their prices and asked the government to investigate.
Reed-Kane adds, when drug companies raise prices it affects everyone in various ways especially through insurance premiums. "We live in America and I know we can't have price fixing, but I think there needs to be some sort of justification as to why drug companies charge what they do if it's astronomical".
Surely, a drug company can spend a lot of money on research to get FDA approval and have to make some of that money back. But, what's reasonable?
"The one thing to understand about drug companies is that they are in the business to make money and do answer to their shareholders. So, the more money they can make the more profit margin there is amd the happier their shareholders are" said Boesen.
There's evidence of one situation in which public outcry pushed a drug company to drop their price. A few months ago, KV Pharmaceutical finally dropped their price on Makena after tremendous negative publicity. Health experts say that patients will have to rely even more on their pharmacists and doctors to tell them whether taking some expensive drugs is even necessary.