Cost Of Prescription Drugs Increases 9.5% Annually, Coordinated By Industry from Natural Blaze
Scripps Research analyzed pharmacy insurance claims from over 35 million Americans, finding ‘continual, marked, annual increases’ of popular brand-name drugs, with price jumps often timed with competitors.
After reviewing tens of millions of insurance claims for the country’s 49 most popular brand-name prescription drugs, a team from Scripps Research Translational Institute found that net prices rose by a median of 76 percent from January 2012 through December 2017—with most products going up once or twice per year.
The substantial price increases were not limited to drugs that recently entered the marketplace, as one might expect, or to those lacking generic equivalents. In addition, the increases often were “highly correlated” with price bumps by competitors.
The researchers concluded that the current rebate system, which incentivizes high list prices for drugs and relies heavily on privately-negotiated rebates to pharmacies, plays a central role driving up costs for consumers. The byzantine and secretive rebate system, they noted, prevents consumers from making informed decisions about purchasing medications.
The study appears in the latest issue of JAMA Network Open.
“It’s no secret that health care prices are growing exponentially in the United States, but what has been less clear is the extent to which certain prescription drugs are contributing to that trend—especially when prices are clouded by a complicated rebate system,” says lead author Nathan Wineinger, PhD, director of biostatistics at Scripps Research Translational Institute and assistant professor in Scripps Research’s Department of Integrative Structural and Computational Biology. “By looking at price data for the most popular brand-name drugs, we found striking and consistent price increases occurring at regular intervals, regardless of competition in the marketplace.”
The Scripps Research team obtained the prescription data from a proprietary Blue Cross and Blue Shield data set known as BCBS Axis, which includes commercial insurance claims from more than 35 million Americans covered by independent Blue Cross and Blue Shield companies in the United States.
With a focus on the 49 most popular brand-name drugs with pharmacy claim data available for the entirety of their five-year research window, Wineinger and his team, led by Eric Topol, MD, conducted a high-dimensional data analysis to examine each claim’s total price. This was represented by the total out-of-pocket costs paid by the insured consumer and the amount paid by the insurer.