DOSE OF REALITY: NEW CMS DATA UNDERSCORES HOW BIG PHARMA’S EGREGIOUS PRICING PRACTICES ARE DRIVING INCREASED HEALTH CARE COSTS
U.S. Prescription Drug Spending Climbs as Big Pharma Sets New Records for Out-of-Control Launch Prices, Hikes Prices Faster Than Inflation and Blocks Competition to Keep Prices High
In case you missed it, a research article from officials with the Centers for Medicare and Medicaid Services (CMS), published in Health Affairs this month, highlights how Big Pharma’s egregious prescription drug prices remain a major driver of U.S. health care spending.
According to the report, retail prescription drug spending increased 7.9 percent in the United States in 2024, totaling $467 billion. The increase in retail prescription drug spending was even larger when looking at just the Medicare Part D program, with a 12.9 percent increase in spending on prescription drugs.
The report also found the number of new active substances in medications launched by drug companies decreased from 65 in 2023 to 48 in 2024—the lowest number of new active substances since 2019.
These statistics can be put in context by considering how Big Pharma is driving health care inflation:
- Big Pharma continues to game the system to block competition and keep drug prices high on top-selling products.
- Big Pharma continues to hike prices on existing products at rates outpacing inflation.
- Big Pharma continues to dramatically increase launch prices for prescription drugs first coming to market.
The newly released CMS data follows the release of a recent CSRxP analysis revealing that the pharmaceutical industry continues to post profit margins 10 times higher than other sectors of the prescription drug supply chain — fueled by an egregious pricing and anti-competitive playbook that continues to drive blockbuster profits.
Read the full research article from Health Affairs HERE.
Read more on CSRxP’s new margin analysis HERE.
Learn more about market-based solutions to hold Big Pharma accountable and lower drug prices HERE.
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