The AARP says that manufacturer prices for brand-name prescription drugs commonly used by people on Medicare rose 9.7% for the year ending in March — the biggest annual jump since the group started tracking prices in 2002. The price of specialty drugs like biologics and injectables rose 9.2%. Generic drug prices, meantime, dropped 9.7%. (All this happened while general inflation hovered around 0.3%.)

The report found that all of the top 25 brand-name prescription drugs had higher prices in the last year. Here’s a list of the top 10, with manufacturer and percent change in manufacturer’s price:

1. Nexium – AstraZeneca – 7.4%
2. Plavix – Bristol-Myers Squibb – 10.5%
3. Prevacid – Takeda – 8.1%
4. Protonix – Wyeth – 9.3%
5. Lipitor (20mg) – Pfizer – 5.5%
6. Lipitor (10mg) – Pfizer – 5.5%
7. Aricept – Eisai – 13.9%
8. Fosamax – Merck – 6.7%
9. Norvasc — Pfizer — 5.0%
10. Advair — GlaxoSmithKline — 7.0%

Industry group PhRMA said in a statement that the report was “misleading” because it doesn’t account for “discounts and rebates generally negotiated between drug manufacturers and payers, which can significantly lower the cost of brand-name medicines, ultimately benefiting patients.” The group also said prescription drugs “represent a small and decreasing share of growth in overall health care costs in the U.S.”

This follows a report last month from pharmacy-benefit manager Express Scripts saying brand-name drugs registered a 9.1% price increase last year, with an 11.5% jump for specialty drugs. An Express Scripts exec told the WSJ then that the increases “were exacerbated by the health care reform debate.” Health-care overhaul legislation includes higher rebates manufacturers must pay to Medicaid. Drug makers disputed that notion, the WSJ reported.

Source: The Wall Street Journal

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Drug prices leaped last year by 9.1 percent. That’s the biggest increase in at least 10 years, Express Scripts found in its annual drug-trend report. Some common meds got double-digit increases, such as the 13.6 percent increase for Eli Lilly’s antidepressant Cymbalta, or the 12.1 percent rise on Merck’s cholesterol med Zetia. Could it be that drugmakers were preparing for the agreed-upon Medicare and Medicaid rebates in the healthcare reform legislation?

Pharma companies say no. The rebates will hurt; Lilly just yesterday predicted that revenues would drop up to $700 million next year because of them. And Lilly tells the Wall Street Journal that its prices weren’t affected by the reform package. New pricing depends on “marketplace conditions and recovery of our R&D costs,” a spokesperson tells the Journal. Likewise, Merck blamed its rising prices on R&D investment, among other things. “[P]rice adjustments are independent of healthcare reform,” a spokesman tells the paper.

Express Scripts begs to differ. The increases were “exacerbated by the healthcare reform debate,” Steve Miller, SVP and CMO at Express Scripts, tells the newspaper. But we might also want to blame other drug-payment “gatekeepers” such as insurers, PBMs, and employers, Credit Suisse analyst Catherine Arnold says. Discounts and rebates offered to those customers can inspire price increases to help offset the costs.

All of these reasons seem to underscore the basic complexity of drug pricing and payments–indeed, the healthcare cost-and-payment world in general. Cut costs here and watch them grow somewhere else. Raise prices on some meds and find discounts eating away at revenues for other drugs. No wonder it took more than 1,000 pages of legislation to change the system.

Source: FiercePharma

Popularity: 3% [?]