Democratic presidential hopeful, Senator Bernie Sanders, is introducing a proposal to lower the cost of generic pharmaceuticals. The cost for these drugs has skyrocketed over the years and Sanders aims to correct this. The proposal will see drug companies pay a rebate to Medicaid incase their prices rise over inflation rates.
In essence, generic drugs are supposed to provide a cheaper choice for patients. TheDailyBeast posted an article that said these are drugs which have lost their patents. Recently however, prices for these type of drugs have been constantly rising at an alarming rate.
Pharmacy benefits manager, Catamaran, reported a 373% increase in the average price of 50 popular generics. In 2010, the drugs were costing $13.14 on average. This price rose to $62.10 in 2010, just 4 years later.
The rise in prices for generic drugs can be attributed to monopoly. In some cases, it is only one company producing the drug, making it possible for such companies to raise prices as they wish. It could also be attributed to lack of price regulations by the United States government. Other countries like Spain and the UK negotiate drug prices with pharmaceutical companies.
The new law been proposed by Sanders is set to give Medicaid a rebate for any increase in price. The proposal will obviously be heavily opposed by pharmaceutical companies. These companies always give reasons such as increase in costs for raw materials as justification for increasing drug prices