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Generic drug prices spiking

Some federal lawmakers are questioning why the prices of a variety of generic drugs have spiked in recent months. Sen. Bernie Sanders (I-VT) and Rep. Elijah Cum...

Some federal lawmakers are questioning why the prices of a variety of generic drugs have spiked in recent months.

Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) sent letters to more than a dozen companies last fall, including five operating in Pennsylvania, asking why their prices had increased as much as 4,000 percent. (Click here for more details)

“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs,” Sanders said. “Generic drugs were meant to help make medications affordable for the millions of Americans who rely on prescriptions to manage their health needs. We’ve got to get to the bottom of these enormous price increases.”

Darrin Silbaugh, pharmacist at See Right Pharmacy in Harrisburg, said the price spikes have impacted medications meant to treat a wide variety of conditions.

“Say we buy a drug for $100 one month, and it’s $300 two months later than that, a lot of times the insurance companies don’t catch up with that reimbursement for us. So, we may en d up losing $30 or $40 per prescription,” said Silbaugh.

A spokeswoman for drug manufacturer Mylan, which is one of the companies the legislators sent letters inquiring about their price spikes, sent FOX43 this statement:

“It is important to fully appreciate the complex dynamics of today’s highly competitive, global generic industry – an industry that has saved the U.S. health care system more than $239 billion in the last year and more than $1.5 trillion throughout the last decade. The pricing of any specific product or products simply cannot be discussed or evaluated in a vacuum. First, generic drug manufacturers, which sell their products through retail pharmacy chains and pharmaceutical wholesalers, do not control the retail price of the pharmaceuticals we make. Those prices are set by third parties not within our control. Further, due to price erosion brought about by strong competition among generic companies from around the world, the average revenue per dose of a generic manufacturer is pennies. As FDA has noted: You might pay $3.50 for a cup of coffee, but only 45 cents for a vial of a particular injectable. Additionally, the average price of established generic products is more than 90% lower than the pricing of the corresponding brand products. Finally, it is important to recognize the significant investment that companies such as Mylan make to ensure the quality of our products. Some of these drugs must be manufactured in extremely controlled environments and require unique shipping and storage conditions, which can lead to large investments and continuing expenses related to facilities and supply chain. Given the dynamics of this competitive market, including fluctuating supply and demand conditions, most academic and governmental research on drug pricing focuses on the significant long-term value created by generics, rather than short terms price swings of a small subset of generic drugs.”

Click on the video player above to see what FOX43 uncovered regarding the reasons behind the cost increases and formal investigations underway in more than one state.

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