A decade ago concern about the rate of drug spending growth was quite high, but the concern ameliorated as generic drugs spread and fewer brand-name blockbusters were introduced. Now, the concern is re-emerging, largely based on the price of new specialty drugs. The Truveris National Drug Index gathers and publishes data on medication pricing. (Truveris Index) Analyzing over 300 million payments, so this seems to be actual prices paid, although all rebates or discounts may not be factored in, for the full year 2014 the average price increase was 10.9% and in December 2014 alone it was 4.6%. Across types of prescriptions, the rise was 14.8% for brand names, 9.7% for specialty drugs and a quite surprisingly large 4.9% for generics. The recent generic price rises are of particular concern because well over 70% of all prescriptions are now written for generics. By therapeutic category, the largest average increase was for muscle pain at 30%, inflammation 27%, chronic obstructive pulmonary disease 23% and heart conditions, 19%. At the other end, drugs to treat gastrointestinal reflux, or heartburn, only saw a 1.5% price rise and medication to treat diarrhea had price growth of 2.8%. Across therapeutic categories, several saw price increases for generic drugs of over 20%, which is pretty astounding. The generic rises may be due to the consolidation in the industry, but whatever the reason, the generic manufacturers clearly are able to implement price increases and make them stick. Drug utilization growth, particularly on a per capita basis, has been relatively modest, but these increases in unit prices are likely to give a boost to overall drug and health spending in coming months.
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About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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