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Report Shows Skyrocketing Costs for 20 Brand-Name Drugs
Prices for each of the 20 most-prescribed brand-name drugs for seniors have increased dramatically every year for the past five years, according to a new report released by U.S. Senator Claire McCaskill (D- Missouri).
The cost of the drugs, which include brands like Advair (fluticasone propionate and salmeterol, GlaxoSmithKline), Crestor (rosuvastatin calcium, AstraZeneca), Lyrica (pregabalin, Pfizer), and Nexium (esomeprazole magnesium, AstraZeneca), all increased an average of 12% every year for five years—nearly 10 times higher than the rate of inflation, the report found.
Twelve of those drugs saw their prices increase by more than 50% in the five-year period. Six of the 20 had prices increases of over 100%. In one case, the cost for a single drug increased by 477% over a five-year period.
In addition, the report found that while prescriptions for top brand-name drugs dropped by 48 million, revenue increased by $8.5 billion over the last five years.
“This report demonstrates that the pricing decisions made by these drug companies are outrageous,” Senator McCaskill said in a statement.
To determine average cost, the report used the annual wholesale acquisition cost, which is an estimate of the manufacturer’s list price for a drug to wholesalers or direct purchasers.
But list prices rarely represent what manufacturers are paid for the drug, as they don’t include discounts or rebates provided to insurers, providers, or pharmacy benefit managers. Research has shown net prices have also risen in recent years, but at a slower pace than list prices.
But even the net prices don’t always show how much patients will pay. The rebates and fees negotiated between manufacturers and pharmacy benefit managers are privately negotiated and don’t have to be publicly disclosed.
And with seniors, Medicare will cover some of the costs of prescription drugs. But McCaskill’s report noted that even with Medicare, seniors face substantial out-of-pocket costs, particularly for specialty and brand-name drugs.
In 2013, the latest year for which data was available, prescription drugs accounted for nearly $1 in every $5 that Medicare beneficiaries spent on out of pocket on health care services.
Soaring drug prices have become a national concern as they account for an increasingly larger share of health care spending.
Democrats and Republicans both agree something needs to be done to curb the cost, but differ on ways to accomplish it.
Democrats want Medicare to negotiate directly with drug companies on prices, while Republicans are focusing on introducing more generic drugs to increase competition in the market.
Senator McCaskill is one of several bipartisan sponsors of legislation to prohibit “pharmacy gag clauses” that can hide potential savings on prescriptions from consumers at the pharmacy counter.
President Trump has blamed high costs on drug lobbies and the complex distribution system and last week promised to roll out a slate of proposals aimed at lowering drug costs.
Source: The Hill; March 26, 2018.