PharmExec Blog

New Study Shows Spike in Branded Drug Prices (Updated 8/26)

The retail price of branded pharmaceuticals spiked 8.3 percent in 2009, according to a new report released by AARP on Wednesday.

This is the first time AARP has measured the retail price of Rx drugs. In the past, the lobby group only tracked the wholesale manufacturers’ price of generic, branded, and specialty drugs, which is traditionally considered to be much higher than the retail price.

The brand name pharma firms had criticized those reports for not taking into account rebates and couponing offered to pharmacies and hospitals.

“What we found was that the prices are still trending way up, and for the most part they are relatively similar increases that we received when we were measuring the manufacturer prices,” AARP spokesperson Jordan McNerney told Pharm Exec in an interview. “Those discounts and rebates aren’t making much of a difference on the bottom line as far as the consumer is concerned.”

The concern was that if the wholesale price of drugs was increasing, then the cost had to be passed along to the consumer.

Boehringer Ingelheim’s prostate drug Flomax saw the biggest jump in price, increasing nearly 25 percent. McNerney pointed out that the treatment’s price appears to have jumped as the drug prepared to go off patent.

In response, the pharmaceutical lobby group Pharmaceutical Research and Manufacturers of America (PhRMA), released a diatribe on its website, supporting drug companies for innovating new treatments. PhRMA also supported industry against catcalls from AARP and another study released at the meeting of the American Sociological Association that claimed that few of the new treatments released in recent years offer significant improvements to patients’ lives.

“AARP’s report is misleading because nearly half of the drugs on its top 25 brand-name drug list were filled as generics in the first part of 2010, but AARP counts these drugs as if they were brand-name drugs,” stated PhRMA Senior Vice President Rick Smith in a release. “The report calculates costs in this inaccurate way even though it acknowledges that brand-name drugs typically lose about 90 percent of their sales after going generic.  The result is an overstatement of consumers’ actual costs for these medicines and there is a tremendous disparity between AARP’s report and the numerous independent analyses showing drug costs growing slowly.”

McNerney explained that the patients most likely to feel the spike in price are those in the Medicare Part D “donut hole.” Once a patient reaches a certain threshold of drug treatment, they hit a cap where they have no coverage and must pay out of pocket.

“We are looking at Congress and industry to control these prices,” McNerney said. “We would love to see Medicare negotiate directly with drug companies so patients can get the best prices on drugs and we would like to see any legislation to get generic drugs on the market faster.”

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2 Comments

  1. Posted December 30, 2010 at 7:21 pm | Permalink

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  2. Posted January 31, 2011 at 9:18 pm | Permalink

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