Economic realities and the health plight of Americans

Abstract

Advair 100/50 193 210 234 259 274 Advair 250/50 240 262 291 321 340 Advair 500/50 316 344 383 422 448 Symbicort 80/4.5 199 212 229 247 267 Symbicort 160/4.5 228 242 262 283 305 Dulera 100/5 226 237 251 288 309 Dulera 200/5 226 237 251 288 309 Nexium 20 195 207 226 268 284 Nexium 40 195 206 226 268 284 repeats itself countless times. People are finding it difficult to catch their breath. They feel hungry for air. They have trouble completing even the smallest, simplest task. Much of their waking time is spent worrying and imagining how they might breathe better given that their medicines are unaffordable. The cost of living invariably increases over time. That said, medication prices have increased at an exorbitant and alarming rate during the past several years. Take the example seen with combination inhaler therapy (longacting b-agonist and corticosteroid), the first choice to treat moderate to severe asthma.1 There are no generic alternatives. The 3 branded combination options, Advair, Symbicort, and Dulera, have seen their average wholesale prices increase 34% to 42% from 2010 through 2014 (Table 1).2 In contrast, during the same period, the consumer price index (commonly estimated as 3% per year) increased only a total of 10%.3 Thus, the reality of medication pricing far exceeds the forces of inflation alone. Why do drug prices increase so much? Isn’t there the expectation that in a free marketplace, one with multiple competitors, prices would be driven down, not up? Economic theory teaches that if demand exceeds supply, then prices reasonably might increase. (The demand for breathing medicines is not inelastic; the need for the medicinemight be). Otherwise, competition is a prerequisite to lower prices, right? For these 3 asthma drugs, the reality is counterintuitive. Consider 3 gas stations at an intersection, locally owned competitors, cater-cornered across the street from one another. Commonly, to increase business, 1 gas station would lower prices to gain business. However, prices of individual drugs have dramatically increased, not decreased, in parallel with one another. This trend is not limited to asthma medication but is seen with other branded medications such as proton pump inhibitors used to treat gastrointestinal reflux (Table 1). Moreover, prices may be even more grossly exaggerated for specialty drugs and generics, many of which report price increases exceeding 1,000% during short intervals.4