I take regular monthly medication through my doctor. Just received an e-mail that the cost is going up from $75 a month to $95 a month. They were just "notified by our suppliers of compound medications, that pricing has increased due to ever-increasing costs for raw materials and shipping costs that have affected the cost of providing finished products to our patients."
Those damn Putin price hikes. Let's go Brandon!
Compounded med pricing can be influenced by either transport costs, or by supply/ingredient costs. In this case, I'd bet that the bulk of it is associated with raw materials costs. There are a number of products that have had significant disruption of ingredient supply chains due to the Chinese response to Covid (ie, shutting down factories). For example, radioactive iodine costs have jumped about 50% in the market and it's becoming tough to get a scan using it. Similarly, the cost of iodine pills has increased dramatically due to Putin's war in Ukraine disrupting production (and resulting in proactive distribution in some areas). And, of course, there's the good old fashioned "doctor markup" on drugs purchased from a physician.
Interestingly, if you were able to take "off the shelf" versions of the med (and I recognize you might not be able to), you'd probably not experience the price hikes. First, traditional manufacturers have already pricing structures that have lots of room to accommodate cost structure increases, as most of the product's price value is in its IP rather than its production, whereas compounding pharmacies tend to be smaller businesses with tighter inventory where the product value is tied to cost/labor. Second (and many will love this), due to an upcoming change in federal law, many manufacturers are actually looking to hold the line on pricing because CPI inflation increases will advantage them. Under federal law, manufacturers are required to offer rebates and discounts to the states and other entities, and the discount depends in part on whether the manufacturers' prices have historically increased faster than CPI inflation. Historically, the maximum amount of the discount or rebate was capped at 100% of the price of the product. But, that cap is expiring in a year or two (ie, manufacturers in some cases may actually have to pay some buyers in connection with the "purchase" of a drug), so right now, if inflation is high and manufacturers hold the line on prices, they may be able to avoid or minimize the impact of the removal of the cap.
