Drug-Pricing Rhetoric: Should Investors be Worried?

The drug-pricing story just won't go away. Bloomberg had a long article about the price of drugs claiming that there might be a drug that cost $1 million annually shortly.

The pricing issue has previously been limited to orphan drug indications, but increases in pricing of drugs for more common diseases has gotten the public's attention; Bloomberg cites Biogen Idec , which raised the price of its multiple sclerosis drug, Avonex, by 147% since 2007 and Novartis' blood cancer drug Gleevec, which has more than doubled over that timeframe.

While we may see some push back on price, drugs that are substantially better than the current standard of care will be able to command higher prices, but drugmakers will need to prove that. Germany claims Gilead Sciences' Sovaldi might not be worth the price because there's not enough evidence that ridding patients of hepatitis C virus reduces the incidence of liver cancer.

In the video below, senior biotech specialist Brian Orelli and health-care analyst David Williamson discuss whether investors should be worried about the drug-pricing rhetoric.

And you thought drugs were expensive...
There's a company that rents a specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click HERE to discover more about this industry-leading stock... and join Buffett in his quest for a veritable landslide of profits!

The article Drug-Pricing Rhetoric: Should Investors be Worried? originally appeared on Fool.com.

Brian Orelli has no position in any stocks mentioned. David Williamson owns shares of Novartis. The Motley Fool recommends Gilead Sciences. The Motley Fool owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story