In recent years, it feels like we’ve been inundated by stories of greedy pharmaceutical companies jacking up the price of important generic medications. In 2015, “Pharma Bro” Martin Shkreli, recognized that no other generic companies were manufacturing Daraprim, a drug used to treat infections common among people with AIDS. So he raised the price of that generic medication from $13.50 a pill to $750, confident that no competitor was around to cut into his market share. The media had a field day with Shkreli’s story, as well as other notorious examples of generic drug manufacturers raising the price of their products by an astonishing amount; consider the ten-fold increase in the price of generic Digoxin (a heart medicine) and Doxycycline (an antibiotic). In fact, worried about such price gouging, Massachusetts Senator (and presidential candidate) Elizabeth Warren has called for the US government to go into the business of manufacturing generic medications.
Just how greedily have generic manufacturers been gouging the American public of late? The truth is surprising. In the last 10 years, the price of generic medications in the US has actually fallen.
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