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A Lack of Competition Leads to Brand Drug Price Increases

Image result for brand drug price increase 2018Inmaculada Hernandez, PhD, assistant professor at the Pitt School of Pharmacy, and colleagues, studied pricing data from the First Databank, along with pharmacy claims from the UPMC Health Plan. Some 19,000 new and existing oral and injectable drugs used in the outpatient setting between 2008 and 2016 underwent analysis. The group aimed to quantify which therapies were the most significant contributors to changes in cost.

“One of the important reasons we conducted this study is to increase transparency in the drug pricing process,” Hernandez said in an interview with Healio Rheumatology. “The prices of new drugs make headlines, but when you look at all of the drugs available on the market, and where the health care dollars are going, it is not just the entry of these new products that is causing the overall increases.”

In their study, Hernandez and colleagues presented results in a number of ways, including a breakdown of brand name and generic drugs. For brand name drugs, the group reported a 9.2% increase for oral drugs and a 15% increase in injectables; the researchers reported that existing drugs largely drove this increase. For generics, oral drug costs increased by 4.4%, while injectable drug costs rose 7.3%. New drug entry drove these increases, according to the findings.

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Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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