ICYMI: Since 2007, Brand-Name Prescription Drug Prices Have Skyrocketed by 60%

IN CASE YOU MISSED IT: As first reported by Axios, a new must-read study from the JAMA Network found that between 2007 and 2018, the net price of brand-name prescription drugs rose by 60 percent. These findings underscore the financial challenges faced by American patients trying to afford the often life-saving prescription drugs they need.

A significant driver of these skyrocketing drug prices is Big Pharma’s abuse of the American patent system. The big brand-name pharmaceutical companies routinely use underhanded tactics like patent thickets and product hopping to skirt the restrictions of the patent system and establish effectively permanent monopolies on their drugs. These drug monopolies allow companies to raise prices at their leisure, all at the expense of American patients.

Key findings:

  • “Using 2007-2018 net pricing data on branded pharmaceutical products in the US, list prices increased by 159% and net prices increased by 60%.” — JAMA Network
  • “Drugmakers often argue that the uproar over drug prices is overblown, saying it focuses too much on list prices instead of the discounted prices insurance plans end up paying. But this study shows that those prices, too, are rising.” – Axios

This study is further proof that if our elected officials are serious about lowering drug prices, then they must reform the patent system. CAPA looks forward to working with all parties to pass key reforms, like the bipartisan Affordable Prescriptions for Patients Act, that will rein in Big Pharma and finally lower the high cost of prescription drugs.

Below are links and full text of the articles:

Changes in List Prices, Net Prices, and Discounts for Branded Drugs in the US, 2007-2018
JAMA Network
Inmaculada Hernandez, Alvaro San-Juan-Rodriguez & Chester B. Good
March 2, 2020

Key Points

Question: To what extent have manufacturer discounts offset increases in list prices of branded pharmaceutical products in the US?

Findings: Using 2007-2018 net pricing data on branded pharmaceutical products in the US, list prices increased by 159% and net prices increased by 60%. Discounts increased from 40% in 2007 to 76% in 2018 in Medicaid and increased from 23% to 51% in other payers, offsetting 62% of increases in list prices for drugs.

Meaning: Although discounts partially offset list price increases of branded products from 2007 to 2018, there was still a substantial increase in net prices over this period.
Abstract

Importance: Most studies that have examined drug prices have focused on list prices, without accounting for manufacturer rebates and other discounts, which have substantially increased in the last decade.

Objective: To describe changes in list prices, net prices, and discounts for branded pharmaceutical products for which US sales are reported by publicly traded companies, and to determine the extent to which list price increases were offset by increases in discounts.

Design, Setting, and Participant: Retrospective descriptive study using 2007-2018 pricing data from the investment firm SSR Health for branded products available before January 2007 with US sales reported by publicly traded companies (n = 602 drugs). Net prices were estimated by compiling company-reported sales for each product and number of units sold in the US.

Exposures: Calendar year.

Main Outcomes and Measures: Outcomes included list and net prices and discounts in Medicaid and other payers. List prices represent manufacturers’ price to wholesalers or direct purchasers but do not account for discounts. Net prices represent revenue per unit of the product after all manufacturer concessions are accounted for (including rebates, coupon cards, and any other discount). Means of outcomes were calculated each year for the overall sample and 6 therapeutic classes, weighting each product by utilization and adjusting for inflation.

Results: From 2007 to 2018, list prices increased by 159% (95% CI, 137%-181%), or 9.1% per year, while net prices increased by 60% (95% CI, 36%-84%), or 4.5% per year, with stable net prices between 2015 and 2018. Discounts increased from 40% to 76% in Medicaid and from 23% to 51% for other payers. Increases in discounts offset 62% of list price increases. There was large variability across classes. Multiple sclerosis treatments (n = 4) had the greatest increases in list (439%) and net (157%) prices. List prices of lipid-lowering agents (n = 11) increased by 278% and net prices by 95%. List prices of tumor necrosis factor inhibitors (n = 3) increased by 166% and net prices by 73%. List prices of insulins (n = 7) increased by 262%, and net prices by 51%. List prices of noninsulin antidiabetic agents (n = 10) increased by 165%, and net prices decreased by 1%. List price increases were lowest (59%) for antineoplastic agents (n = 44), but discounts only offset 41% of list price increases, leading to 35% increase in net prices.

Conclusions and Relevance: In this analysis of branded drugs in the US from 2007 to 2018, mean increases in list and net prices were substantial, although discounts offset an estimated 62% of list price increases with substantial variation across classes.

[full study available through link]

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Brand-Name Prescription Drug Prices Have Spiked Since 2007
Axios
Caitlin Owens
March 4, 2020

The price of brand-name prescription drugs went up by 60% between 2007 and 2018, after accounting for rebates and discounts, according to a new study in JAMA.

Why it matters: Drugmakers often argue that the uproar over drug prices is overblown, saying it focuses too much on list prices instead of the discounted prices insurance plans end up paying. But this study shows that those prices, too, are rising.

  • And patients who are uninsured or haven’t yet met their deductible are exposed to the list price of a drug, not its discounted rate.

By the numbers: The average Medicaid drug discount increased from 40% in 2007 to 76% in 2018, the study found.

  • Discounts to other payers increased from 23% to 51%.

For more information, please visit www.capanow.org