What's behind prescription drug price hikes

Posted at 10:05 PM, Jun 01, 2016
and last updated 2016-06-01 23:45:44-04

Sticker shock at the pharmacy. Prescription drug costs are skyrocketing, and these are drugs that have been around for years.  The medications haven't changed, but the price tags have.  And manufacturers don't have to explain the mark up.

This is happening with a lot of different drugs, some of them lifesaving like the EpiPen.  It delivers a quick dose of epinephrine to counter a severe allergic reaction, but one local family had to go without the medication for a while because of the high price tag.

Dave Pozorski's teenage son was having an allergic reaction and had to be rushed from school to the emergency room.   "When I showed up he was all covered in hives and was having trouble breathing," Dave told us.

Dave is a TODAY'S TMJ4 employee and also a concerned dad.  Zach was diagnosed with a severe peanut allergy at four.  The EpiPen has been a constant companion until this year when Dave went to refill Zach's prescription and experienced sticker shock when the pharmacist told him it would be $528.  "We were like uh, no.  I don't think so."

Last year, the Pozorski's paid $55 for a kit, which includes two pens. When Zach had his allergic reaction at school the family had not yet supplied the nurse with a new EpiPen.   "The escalation in price just doesn't make any sense," Dave pointed out.

From 2007 to 2014 the wholesale price for the EpiPen skyrocketed.  It's up more than 200%.  Something that's happening to many prescription drugs that have been around for years, like a common antibiotic used to treat bacterial infections.  Doxycycline went from $20 a bottle to more than $1800 in just one year. That's more than a 9,000% increase.

And the cost of cancer drug, Gleevec, shot up 158% going from $118 a pill to more than $300. 

Bill Quandt owns Hayek's Shorewood Pharmacy.  In the business since the mid-60's he's never seen anything like this.  "There's no explanation, no logical explanation for that," Quandt said.

Some of the meds have become so expensive Hayek's has stopped pre-ordering them.  That includes a steroid cream used to treat skin conditions. It's now running $171 wholesale.  A year ago it was 35%.

Quandt tries his best to find alternative treatments for patients who can't afford increased costs, but there's not always another option.  "We're not at fault, but we have to say that's what you gotta pay."

In just 2015 alone, prescription drug prices jumped an average of 15% across the board.  There are no tools in place to control what drugmakers charge for their products.  In most cases companies also don't have to share what it costs to make a drug or why it's been marked up. 

According to one national trade association health plans and consumers are on the same side in this, because both end up absorbing the increase.  Spokesperson for America's Health Insurance Plans, Clare Krusing, told us in a phone interview "ultimately we are all paying for prescription medications. We're paying for it in our premiums, and we're paying for it in higher out-of-pocket costs."

After Zach's allergic reaction a month ago the Pozorski's pooled money from friends and family and bought a new EpiPen kit, but they're already worried about next year. "What are we gonna do? Have to fork out more than $400? Is the sky the limit in this?"

We contacted Mylan, the manufacturer of the EpiPen, about the drastic price increase.  Here's the companies full statement:

"Mylan has worked tirelessly over the past years advocating for increased anaphylaxis awareness, preparedness and access to treatment. As the leaders in this space, our efforts are aimed at benefiting those living with potentially life-threatening (severe) allergies, and we take this leadership position seriously.

Mylan does not set the final retail cost of its products charged to patients. One would have to look across the many parties that constitute the distribution channel as they all play a role in the ultimate access and retail price of prescription drugs in the marketplace.

We are proud of our patient programs which help support access to treatment:

·         Today nearly 250 million insured Americans have access to EpiPen® (epinephrine injection) Auto-Injector. For a vast majority of patients, insurance coverage coupled with Mylan's My EpiPen Savings Card™ means that they could be eligible to receive up to three EpiPen 2-Pak® or EpiPen Jr 2-Pak® cartons per prescription at no cost. Additionally, Mylan offers a patient assistance program for qualifying patients.
·         With the rate of food allergies among U.S. children on the rise, now affecting one in 13, preparedness for anaphylaxis in the school setting is critical. Mylan implemented the EpiPen4Schools® initiative in 2012, which provides four free EpiPen® or EpiPen Jr® (epinephrine injection) Auto-Injectors to qualifying schools in the U.S. Today, more than 64,000 schools have participated in the program, including more than 1,500 schools in Wisconsin, and 47 states now have laws related to stocking epinephrine auto-injectors so they may be available to someone experiencing anaphylaxis in the school setting. Several cases in schools across the country in which the free EpiPen® Auto-Injectors were used to treat an anaphylactic reaction underscore the positive impact of the program.
·         To further our mission and commitment to ensuring access to treatment, we continue work to expand access to epinephrine beyond schools. Twenty-six states now have entity epinephrine stocking legislation so that public places such as restaurants, colleges and universities, and child care facilities may stock undesignated epinephrine auto-injectors.

We look forward to continuing our unparalleled efforts to drive anaphylaxis awareness, preparedness and access to treatment in support of the millions of families in the U.S. that are managing severe allergies.

EpiPen Savings Card, click here.

Then and Now Cost of Prescription Drugs (AHIP), click here.