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US prescription drug net costs rose three times faster than inflation from 2007 to 2018

Published on 05/03/20 at 09:31am
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The nest cost of prescription drugs rose over three times faster than the rate of inflation over the course of a decade, according to a new study that is the first to report trends to net drug costs for all brand-name drugs in the US.

The study, published in JAMA, was one of three papers released by the Center for Pharmaceutical Policy and Prescribing (CP3) at the University of Pittsburgh’s Health Policy Institute. The team used revenue and usage data for 602 brand name drugs to track net and list prices from 2007 to 2018.

Net prices in particular, which account for manufacturer discounts, rebates and coupon cards, increased by 60%, which is 3.5 times general inflation. These began to level off in 2015 but this does not mean prescription drugs became more affordable. This is because most discounts to net prices mostly consist of rebates paid to public and private insurers and don’t affect what patients usually pay.

Walid Gellad M.D., the senior author of the paper, commented on his work and said: “We’re seeing a lot of discussion that net prices have stabilized over the last few years, and that does appear to be the case. But the stabilization of net price comes on top of large increases over the last decade, many times faster than inflation, for products that have not changed over this time period. In addition, this net price is an average, with substantial variability across payers and drugs.”

Conor Kavanagh


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