Wednesday, November 28, 2012

U.S. Brand Drug Prices Take Flight While Generic Prices Plummet

Express Scripts just published its "Inaugural Drug Trend Quarterly," which provides the "first comprehensive overview of U.S. prescription drug spending for 2012 (see press release here). The key findings include:

  • The Index shows that since September 2011, price inflation for the most highly utilized brand-name medications was more than six times greater than overall economic price inflation for consumer goods.
  • The price gap between brand-name and generic medications widened an additional 35.2 percentage points from September 2011 to September 2012, the largest one-year increase Express Scripts has recorded (see chart below).
  • Year-to-date spending on specialty medications is up 22.6 percent, underscoring the nation's need for an accelerated pathway for biosimilars.

Here's the chart that tells it all (click on it for a larger view):

In other words, brand drug prices INCREASED 63% since 2008, while generic drug prices DECREASED 39%. Overall prices in the U.S. increased 9% during that time.

The 35.2 percentage point net inflationary difference is the largest gap between brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.

"The big takeaway from this for me is actually not so much that we have ongoing brand inflation, because we've always had that, though it's larger than usual," said Steve Miller, chief medical officer for Express Scripts. "What's really remarkable is the gap (between branded drug prices and generics) is getting larger because of the number of generics and the discounts on those generics are steep."

I would call the "larger than usual" brand-generic price gap in 2012 the LIPITOR EFFECT, meaning that the shift from branded Lipitor to generic versions may have played a big role in widening that gap. As an aside, recall another LIPITOR EFFECT: on DTC advertising (see "Lipitor Holds Key to DTC Ad Spending in 2012").

No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...