January 29, 2015

Big Jump in Drug Costs from 2013 to 2104

If you’re an average citizen who required prescription medication in 2014, you paid about 10.9% more than you did in 2013.

So says Truveris, a research firm that tracks drug costs. The sample was certainly significant; the company evaluated more than 300 million payments to American pharmacies. That’s nearly one prescription for every man, woman, and child in the United States.

When Truveris broke costs out according to drug category, the year-to-year increases broke down this way:
  • +14.8% for brand name drugs,
  • +9.7% for specialty drugs (These meds require special handling, administration, or monitoring, and are used to treat complicated and chronic conditions like multiple sclerosis, hepatitis C, and hemophilia.)
  • +4.9% for generic meds

While there was particular controversy about increases in drugs for cancer and hepatitis C, the rise in generics also caused surprise, since this category has always been seen as the low-cost option to pricey brand name drugs.

Based on composites of brand name, specialty, and generic drugs, treatment for several conditions showed especially dramatic increases:

  • +29.8% for meds to treat muscle pain and stiffness,
  • +26.6% for salves to treat inflammation,
  • +23% for drugs to treat chronic obstructive pulmonary disease.

Cost Changes for Brand Name Drugs
Among brand name drugs only, cost for treatment of these conditions and illnesses showed the sharpest increases from 2013:
  • +52% for enlarged prostate,
  • +30% for drugs to treat Parkinson’s and asthma,
  • +23% for drugs to treat Alzheimer’s,
  • +19% for drugs to treat erectile dysfunction.

On the flip side, brand name medicines for other conditions rose little. Why? Truveris analysts suggest that brand name drugs for these issues faced increased competition from generics:
  • +1.5% for drugs to treat gastroesophageal reflux disease (GERD),
  • +2.8% meds to combat diarrhea.

Cost Changes for Generic Drugs
Among generics, treatment for several conditions rose dramatically:
  • +31.9% for meds to treat muscle pain and stiffness,
  • +31.7% for meds to treat inflammation,
  • +23.7% for heart medicines,
  • +18.1% for acne treatments,
  • +11.8% for antibiotics.

The Truveris review indicated that increases in dosages helped drive these cost hikes.

On the other hand, generic cost increases to treat some conditions were modest:
  • +.1% for allergy relief,
  • +.6% for diabetes meds.

Competition and abundant supplies were key explanations for these negligible changes.

Why the Cost Hikes for Consumers?
The Traveris review lists several reasons:
  • Big Pharma cites its own rising costs generally, and its need to recoup particularly high costs for treating rare diseases and certain cancers,
  • Quality control issues disrupted production of some generics,
  • Some meds were discontinued when profit margins slipped and competition waned, thus driving up prices.

Truveris president and CEO Bryan Birch offered another reason for the hefty cost increases from 2013, which he calls “inflationary pressure.” Big Pharma feels the pressure to offer rebates and discounts to big pharmacies, which then raises the wholesale costs for consumers.

He explained:
They [Big Pharma] are taking these price increases wherever they can to make up for those additional price breaks. It’s heightened over the last several years and we don’t see the trend abating. For brand-name medicines, the increases could be 12% to 15% for the foreseeable future.

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