What's Causing Pharmaceutical Drug Prices to Rise?

Drug manufacturers are pushing the limits when it comes to treatment, but paying for them has become a problem.

U.S. pharmaceutical sales are back to double-digit growth, something that hasn't been seen in the past 15 years when "blockbuster drugs" came on the market.

This double-edge sword is not only good for the economy, but is a sign that new drug therapies are being created, and more people are getting treatment.

But, it also means that prices for these treatments are steadily climbing, making them highly expensive.

What's exactly the driving force behind of this?

Experts say it is mostly two things, biologic drugs and specialty medicines.

"Innovation in the marketplace is driving prices," said Douglas M. Long, Vice President, Industry Relations, IMS Health. "Specialty market spending growth is fueled by new brands."

MORE FORUM COVERAGE: BALANCING INNOVATION WITH PHARMACEUTICAL DRUG COST 

And, those specialty medicines now account for 35 percent of U.S. drugs sales, said Long.

Long was one of the first speakers during the recent forum on pharmaceutical drug prices at the Health and Human Services Department in Washington, D.C.

"Innovation is there, we have ability to treat the patients, but coming up with the money is the big thing," he said.

 

For example, he explained that by 2020, 91 percent of drugs used to treat cancer will be targeted.

"We are moving in the direction that we will know the cancer drug will work before giving it to them," he said.

This level of specialty-type treatments, however, can cost big bucks, which is why experts like Long are closely watching the biosimilar market.

"Where we will see price competition is when there are multiple entries into that [drug type market]," he said. "And, that's likely to happen in the next few years."

More in Pharmaceutical