The drug-pricing story just won't go away. Bloomberg had a long article about the price of drugs claiming that there might be a drug that cost $1 million annually shortly.
The pricing issue has previously been limited to orphan drug indications, but increases in pricing of drugs for more common diseases has gotten the public's attention; Bloomberg cites Biogen Idec (NASDAQ:BIIB), which raised the price of its multiple sclerosis drug, Avonex, by 147% since 2007 and Novartis' (NYSE:NVS) blood cancer drug Gleevec, which has more than doubled over that timeframe.
While we may see some push back on price, drugs that are substantially better than the current standard of care will be able to command higher prices, but drugmakers will need to prove that. Germany claims Gilead Sciences' (NASDAQ:GILD) Sovaldi might not be worth the price because there's not enough evidence that ridding patients of hepatitis C virus reduces the incidence of liver cancer.
In the video below, senior biotech specialist Brian Orelli and health-care analyst David Williamson discuss whether investors should be worried about the drug-pricing rhetoric.