Like 60s Cars, Brand Drugs Have no Price Competition
Brand name drugs, like American cars in the 1960s, are subject to broadly rising prices with little evidence of competing on cost.
Before the oil embargo by Arab countries in 1973 allowed competition from more affordable, fuel efficient cars that we take for granted today, the Big Three car manufacturers, Ford, Chrysler and General Motors, would annually announce price increases at about the same time. Any adjustment by one manufacturer, for example, in size, was quickly matched by competitors.New research analysed the prices for five classes of drugs, and found them to be increasing in lock-step from 2015 to 2020. These classes are direct-acting oral anticoagulants (DOACs), P2Y12 inhibitors, glucagon-like peptide-1 (GLP-1) agonists, dipeptidyl dipeptidase-4 (DPP-4) inhibitors, and sodium-glucose transport protein-2 (SGLT-2) inhibitors.
The study had limitations due to not taking into account measures such as rebates, which would affect the price for the patient. However, even if these were taken into consideration, the researchers believe the overall prices would still increase and have to be borne by some patients who would not benefit from certain rebates. “Rebates, list prices, and net prices have been growing for brand-name medications, and rebate growth has been shown to positively correlate with list price growth, thereby impacting costs faced by patients paying a percentage of (or the full) list price,” the researchers noted. “Therefore, the lock-step price increases of brand-name medications, without evidence of price competition, raise concerns and would be expected to adversely affect patient adherence to medications and thus clinical outcomes.”
Unlike the oil crisis which broke open the automobile market to foreign competitors, the solution with “Big Pharma” is less clear. The researchers recommend policies which would limit such lock-step price increases, reduced patent exclusivity periods, and quicker introduction of generic equivalents.
Source: MedPage Today
Journal information: Liu P, et al “Trends in Within-Class Changes in US Average Wholesale Prices for Brand-Name Medications for Common Conditions From 2015 to 2020” JAMA Netw Open 2021; DOI: 10.1001/jamanetworkopen.2020.35064.
