Fortunately, the outrage generated by news of this price increase was loud enough that alternatives to taking that pill were found. And in a bit of karmic justice, the executive himself was later arrested on charges related to other aspects of his business.
That’s admittedly an outlier of an example, but it’s not unheard of for drugs to sustain price hikes. While competition can keep most generic drug prices in check, drugs for rare diseases and obscure physical issues can be costly.
Governments in several states are stepping in with “cost transparency” bills that will require drug companies to justify prices of their drugs. The regulators would receive information that will determine if the price to consumers is reasonable based on cost structures from the manufacturer.
Pharmaceutical companies often complain that research costs justify their prices, but the government will make the final determination on that issue. One worrisome note is that manufacturers will present data that does not reflect the total truth about costs, much like movie producers and book publishers often manipulate royalty statements.
While such actions may keep drug prices reasonable, it’s not guaranteed. Another government tactic being considered is to free Medicare to negotiate drug prices, which it is currently barred from doing (Medicare pays what manufacturers request). The idea is to allow Medicare to do what Medicaid and the Veterans Administration already have license to do, resulting in much lower costs for their constituents.