MINNEAPOLIS - The average price of brand name drugs increased about 13 percent in 2013, more than eight times the rate of inflation, according to a recent U.S. Senate committee report.
About one-third of generic drugs in the U.S. also increased in price last year – some by a few percent – some by 1,000 percent.
"I really do believe in markets, but this market is so broken," said Steve Schondelmeyer, a pharmaceutical economist at the University of Minnesota College of Pharmacy who presented a report on the change in U.S. drug prices to the U.S. Senate Committee on Health, Education, Labor, and Pensions (HELP).
American competition in the generic drug market has lessened as more generic drug makers have consolidated, but Schondelmeyer believes the biggest reason companies are cranking up prices is because nothing is stopping them.
"The drug company can charge whatever they want to and they get away with it. We don't have any form of regulation or even monitoring of prices at the federal government level," said Schondelmeyer.
Tom Sengupta is the owner of Schneider Drug in St. Paul, one of the few remaining independently owned drug stores in the Twin Cities.
Drug prices and pricing practices are the worst he's seen in 43 years.
"Drug prices are only the symptom in our society, because we are losing our moral compass. And we have to get that back," said Sengupta.
It is currently against federal law to import prescription drugs from outside the U.S., but Senator Amy Klobuchar hopes to change that.
Along with Sen. John McCain, Klobuchar introduced a bill over the summer called "The Safe and Affordable Drugs from Canada Act" that would allow U.S. citizens to import drugs from Canada and bring greater competition into the pharmaceutical market. The bill is currently in committee in the Senate.
"This bipartisan bill would make a commonsense fix and allow individuals to import safe, low-cost prescription drugs from Canada, injecting new competition into the U.S. pharmaceutical market and bringing down costs for families," said Klobuchar.
Ralph Neas, the president of the Generic Pharmaceutical Association, said in a recent statement that some have mischaracterized the facts about drug prices.
"Generics saved $239 billion in 2013 (a 14 percent increase in savings from 2012)," he said.