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How Drug Companies Get Away With Drastically Raising Prescription Drug Prices

DENVER (CBS4) – President Obama plans to hold a forum this week to discuss recent spikes in prescription drug prices. In 2014, drug costs have gone up 15 percent, which is the biggest one year increase in a decade, according to the mail order pharmacy Express Scripts.

The most expensive drugs, now labeled "specialty drugs," went up a whopping 30 percent year to year.

Suzanne Pershall of Golden has experienced the increases firsthand. She injects Copaxone, a multiple sclerosis drug, three times a week. The drug keeps her MS symptoms at bay.

"I'm very thankful for that," she said.

Suzanne Pershall
Suzanne Pershall (credit: CBS)

But in the years Pershall has been taking the drug, the price has increased 381 percent. Pershall says some MS patients simply can't afford their medications.

"I've actually had a volunteer sitting with me teary eyed trying to decide if she was going to buy her daughter a gift for Christmas or pay for her MS therapy," she recalled.

Dan Hartung researches MS drug prices at Oregon State University and says the top nine therapies have "increased substantially" over the past 20 years. He says currently, there are no MS drugs in the United States with a list price below $50,000 a year.

His study, published in the Journal of Neurology, shows how older drugs like Copaxone have increased in price dramatically even as newer drugs have come to market.

"Pharmaceutical companies can raise prices," said Hartung. "They do so to raise profits. That's their mission. They are private companies."

The Pharmaceutical Research and Manufactures of America (PhRMA) says there is a reason for the steep increases.

The trade organization says it takes 10 years to bring a new medication to market and costs nearly $3 billion in research. Also, the profits from one drug might fund the next big breakthrough.

Dr. Cindy O'Bryant with the Skaggs School of Pharmacy and Pharmaceutical Sciences​ at the University of Colorado says she's seen big price hikes in cancer drugs and heart medications. Even some antibiotics have become too expensive for patients.

"It places a huge financial burden on the patient, one that sometimes can be insurmountable for them," she said.

Her colleague, Dr. Robert Page, said he encounters patients who can't afford their medications on a daily basis. He called the situation "heartbreaking." He said insurance companies often pass the cost of the medication on to patients through higher co-pays.

"They don't have $80 to pay for that," he explains, "so they don't pick up the medication."

To help offset the increases, most drug companies offer co-pay assistance programs. But Dr. Page says patients typically don't know where to look for the help.

"A lot of my time is spent trying to get that drug for that patient that could be life-saving," he said.

Co-Pay Assistance Programs

To find out if you may be eligible for co-pay assistance a simple web search for "your medication" and "co-pay assistance" program is a great way to start. The details of many co-pay assistance programs are right on the drug manufacturers websites. The brand name version of your medication may actually be more affordable than the generic because co-pay assistance is offered more frequently from makers of brand name drugs. Some co-pay assistance programs have maximum income eligibility requirements, others do not. Consult your doctor, sometimes switching to a comparable drug may be more affordable.

There are also foundations designed to help pay medical costs:

- Patient Advocate Foundation
- Patient Access Network

Mark Ackerman is a Special Projects Producer at CBS4. Follow him on Twitter @ackermanmark

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