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Lawmakers Consider The Reasons Behind High Drug Prices

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Prescription drug prices have continued to increase and the reasons are complicated. A study committee examining causes of high drug costs heard about rebates, high deductible insurance plans and tiered drug systems as reasons why. 

Michael O’Connor, with Eli Lilly and Co., has been working with lawmakers to better understand the cost issue. 

"Our work to establish a review of the prescription drug supply chain is based on the knowledge that this is a system and you must understand the inputs of a system before you understand the outputs," says O'Connor. 

Indiana lawmakers heard from drug makers, consumers, doctors and industry experts about some of the driving factors. 

Kristina Moorhead, senior director of Pharmaceutical Research and Manufacturers of America says a complex pricing structure influences cost. 

"So there is some perverse incentives in how the marketplace works right now," says Moorehead. 

Antonio Ciaccia is with 3 Axis Advisors, a company that analyzes health care costs. He says more transparency is needed to understand the scope of the problem. 

"The lesson here is you need data," says Ciaccia. 

Prescription drugs make up about 15 percent of American health care spending.

Policies that other states have adopted include capping co-pays and right-to-shop laws. 

Contact Jill at or follow her on Twitter at @JillASheridan.