Bloomberg scrutinizes drug pricing
A drug pricing analysis conducted for Bloomberg found that prices doubled for dozens of established drugs, sometimes without any corresponding improvement, and that the launch prices of new drugs continue creeping upward.
Moreover, despite the fact that generic drugs comprise 86% of all medicines sold in the US, they have not reduced total spending on prescription medicines, which grew by 11% between 2007 and 2012, the news service found, citing "government data." (By contrast, the IMS Institute for Healthcare Informatics found that total US spending on drugs decreased in 2012.)
One reason for the increases was drugmakers' desire to hike prices on protected products to make up for blockbuster LOEs. Reporter Robert Langreth's analysis also suggests that the recent merger fervor could send prices even higher.
The downside: financial strain on patients. “Every day in my clinic there are patients who start discussing they can't afford this drug or that drug” because it costs too much, wrote one leukemia doctor in an op-ed cited by Langreth.
On the other hand, PhRMA's executive VP for policy, Lori Reilly, noted that “you have to look at the significant contribution that many of these medicines make to improving outcomes,” adding that drug price increases have actually been slower than the growth of other healthcare prices.
Pfizer spokesperson, Andrew Topen, wrote in an e-mail to Bloomberg, “Drug prices reflect many factors such as development risk, the ever-increasing cost of doing business, and their value to the health system.”
Langreth also quotes data from the IMS Institute for Healthcare Informatics showing that last year, increases in prices for existing branded prescription drugs accounted for $20 billion of the industry's 2013 sales growth. For more analysis of those 2013 spending numbers, see The Pharma Report 2014, from the May issue of MM&M.