Median Price for New Medications Reportedly Sees Notable Spike

(RepublicanView.org) – The cost of new pharmaceutical drugs was 35% higher in 2023 than it was the year before, according to a recent report from Reuters.

Much of the increase reportedly stemmed from medications for rare conditions since pharmaceutical companies can more easily raise the prices of essential, specialized medications. The median price for a new medication was $300,000 in 2023. It was $222,000 in 2022, and it was $180,000 in 2021, per information published in JAMA.

Many of the diseases treated by the new drugs impact a very small number of people in the U.S.; they are often referred to as “orphan diseases.” Most of the conditions in this category affect fewer than 200,000 Americans.

The Institute for Clinical and Economical Review’s chief science officer, Dan Ollendorf, said the price increases are occurring “without any clear rationale.” He also cited the lack of alternatives as a significant concern. According to the BrightFocus Foundation, sources suggest that the process of creating a drug that will receive FDA approval currently hovers around $1 billion.

The cost of medication has been a notable talking point in Congress and for President Joe Biden in recent years. Biden signed an executive order in 2022 to help lower the overall price of medications. He said it would protect beneficiaries from soaring medical costs and help save Americans hundreds of thousands every year. However, nearly half of Americans reported that it was either difficult or impossible for them to afford their medication the following year.

Gene therapies have become especially pricey. Some rise well into the millions. Fewer people tend to need them, but they often mean the difference between life and death. The U.S. government incentivizes orphan treatments, yet the prices continue to rise quickly. According to Reuters, Pharmaceutical companies claim they have little control over how much consumers actually pay for their care. They’ve also claimed that newer medications can help reduce the risk of side effects or future health problems, thus helping consumers save on emergency room visits.

However, some patent expirations could lower the price of many generic drugs. Still, most of the increases stem from medications and treatments that have few or no generic alternatives.