"Unsupported" drug price hikes cost Americans billions

A building with the AbbVie logo and palm trees in the foreground.
AbbVie's Humira manufacturing plant in Puerto Rico. Photo: AbbVie

Price hikes on 7 prominent drugs — all of them above the rate of medical inflation, none supported by clinical evidence — cost Americans more than $5 billion over the last two years, according to a new report from the Institute for Clinical and Economic Review.

Why it matters: Drugmakers weren't hiking prices because their medications were safer or more effective than when they were approved. They did it because they could.

AbbVie to buy Allergan in $80 billion deal

AbbVie headquarters building with an AbbVie sign in front.
AbbVie is buying Allergan at a much cheaper price than Pfizer offered in 2015. Photo: AbbVie

AbbVie is acquiring Allergan for $63 billion in cash and stock, in a deal valued at about $80 billion after factoring in Allergan's debt. The company is banking that Allergan's Botox, along with other beauty and eye drugs, will ease the transition as AbbVie's Humira loses U.S. patent protection in 2023.

Why it matters: A combined AbbVie and Allergan — both of which have engaged in controversial patent tactics to protect the moats around their blockbuster drugs — would be one of the largest companies in the rapidly consolidating pharmaceutical industry.