As a follow-up to her article Why Are Generic Drugs Getting More Expensive?, Kay reviews recent generic and brand inflation trends.
Elsevier is now conducting a Generic Price Volatility Survey. It will take fewer than 10 minutes. If you complete the survey, then Elsevier will send you a report with the survey results.
For more background on this important trend, read Kay's article below and download Elsevier’s free white paper Generic Drug Price Increases: Causes and Impact.
Impact Survey: Rising Generic Drug Prices
By Kay Morgan, Vice President of Drug Products & Industry Standards Clinical Solutions at Elsevier
Why Are Generic Drugs Getting More Expensive?. That article drew a great deal of interest, confirming how important generic price volatility is to stakeholders in the drug supply chain.
It is important to note that it is not just generic drug prices that are increasing. According to the National Center for Policy Analysis (NCPA), brand name drugs are increasing as well, especially among specialty drugs. EvaluatePharma confirmed the increasing cost of prescription drugs is concentrated in specialty drugs. Of the top 100 selling drugs in the United States:
- The median revenue per patient of the Top 100 drugs increased from $1,260 in 2010 to $9,400 in 2014, representing a seven-fold increase;
- There were seven treatments priced in excess of $100,000 per patient per year in 2014, versus four in 2010.
There is no question that many generic drugs have greatly increased in price. While it is true that 1,000 percent and higher increases are rare, the average price increase of 8.6 percent, from November 2013 to November 2014, is still three times the rate of inflation. So, there is no question that we are seeing generic drug price increases, and there is no telling how long this trend will continue.
So, what impact are these price changes having on the pharmaceutical supply chain?
The significant effects of rising generic drug prices have captured the attention of the media and legislators alike. These effects include (1) high costs to hospitals for cancer therapies and other essential drugs, and (2) rising out-of-pocket costs to consumers.
A few noteworthy examples are:
- Tetracycline Hydrochloride—a commonly prescribed drug used in the treatment of bacterial infections.
- Tobramycin—a drug used for treating lung infections in patients with cystic fibrosis.
- Niacin—a drug used to lower the risk of heart attacks in patients with high cholesterol. Niacin is also used in the treatment of coronary artery disease (atherosclerosis).
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Dr. Adam Fein’s Aug. 13, 2014 article on Drug Channels explains how the entire drug supply chain is affected in some way or another by rising generic drug costs.
Consumers are facing higher prices and payers are dealing with higher drug spend. Physicians are finding the need to prescribe alternative drug therapies and are dealing with angry patients. Pharmacists are dealing with low reimbursements and can actually lose money when drugs are purchased at higher prices but reimbursed at lower, predetermined rates. Pharmacists are also working with providers to recommend alternative treatments in order to help consumers understand and afford their medications. In some cases, consumers are declining their medications due to increased prices.
Currently, drug manufacturers and wholesalers are benefiting from higher drug prices. As noted in my Feb. 20, 2015 Drug Channels article titled Why Are Generic Drugs Getting More Expensive?, generic drug manufacturers are facing congressional scrutiny. New written regulations may be passed requiring generic companies to offer additional rebates to State Medicaid, if the drug’s average manufacturer price (AMP) for a current quarter exceeds the current Consumer Price Index-Urban (CPI-U). Typically, higher generic drug prices attract more generic manufactures to the market and serve to stabilize generic drug volatility. However, it is a mystery as to why more generic manufacturers are not entering the market.
Generic drug price inflation impacts every stakeholder across the commercial drug supply chain. Help measure the impact of rising generic drug prices on the pharmacy industry by participating in the Generic Price Volatility Survey. Join other industry experts in reporting how generic price inflation is affecting your organization. This survey will take no more than 10 minutes and the full survey results will be shared in a report with all participants.
As the pharmacy industry works through strategies to manage rising drug prices, and generic manufacturers face possible penalties, the need to access truly current drug price information and analyze pricing changes is greater than ever before.
Elsevier’s drug pricing information includes data reported directly from pharmaceutical manufacturers. These data are updated as they are received, including on weekends and holidays.
While there is no immediate or simple solution for rising generic drug prices, truly current and accurate drug price data ensure that pricing decisions are made with accurate information, that reimbursements are fair and balanced, and that pricing analysis and reporting is both strong and vigilant.
For more information on the Generic Price Volatility Survey, please email Loretta Lombardo
Elsevier—The Drug Price Leader