Novartis launched its cancer-busting medicine, Gleevec, in 2001. At that time, the list price was $26,400 a year. The dur company’s CEO acknowledged it was expensive, almost prohibitive but today, 15 years later, the drug that treats a rare form of leukemia, now costs a whopping $120,000 a year—despite the fact that similar drugs have come on the market.
This is because, unlike most other markets in the U.S. where competition determines price, the pharmaceutical industry actually controls the drug market and sets the costs of medications according to profit goals and margins.
The history of Gleevec’s pricing is a prime example: instead of coming down in price when other second-generation drugs became available, Novartis raised its price faster and faster. That’s not competition, that’s price fixing.