Pfizer Inc. (NYSE:PFE) and Eli Lilly and Co (NYSE:LLY) are yet again the subject of immense criticism as their practice of increasing the prices of key drugs in the impotence drug market in tandem continues to leave patients with no other options. Over the last five years, prices for Viagra and Cialis have more than doubled.
Eli Lily And Pfizer Defense
Pfizer’s Viagra retails for $48.28 a tablet while Eli Lily’s Cialis goes for $51.74 a tablet.
“I can’t afford to pay for a higher-dose Cialis, “ says Mr. Monterius Chapple, a 37-year-old county prison worker from Huntington, Tennessee who surprisingly did not request anonymity.
Amidst the firestorm from the public, the two drug makers insist that the two drugs are fairly priced given the costs incurred to produce them, even though from an economics perspective, costs of production have nothing to do with price, and only supply and demand determine price. In a bid to justify their pricing, Pfizer says that a good number of insured patients pay as little as $6 out of pocket as insurance companies cover the rest. Patients pay insurance premiums, however, one way or another.
Eli Lily in its defense says it might opt to overhaul health insurers from its payment system if the same would go a long way in ensuring much lower costs for Cialis.
Growing Demand For Generic Versions
The pumped up drug prices are already fueling demand for generic versions at a much lesser cost. For instance, patients who cannot afford Pfizer’s Viagra are increasingly turning to Revatio, which costs $1.01 a pill.
Rising prescription drug costs have also forced CVS Health Corp (NYSE:CVS) to start embracing cheaper copies of biotech medicines, given that they are the only ones that a majority of people can afford. The pharmaceutical giant has already started to drop coverage for higher priced medicines as copies of branded drugs continue to flood the market.
Pharmaceutical companies going for generic drugs at the expense of branded drugs should spell more trouble for the likes of Pfizer and Eli Lily as consumers resort to affordable options in the market.
Eli Lilly stock was down by 2.78% in Monday trading session closing the day at lows of $67.2 a share. Pfizer on the other hand was down by 0.47% closing the day at $31.54 a share.