Increased net prescription drug prices despite manufacturer discounts
Researchers have determined that between 2007 and 2018, net costs of prescription drugs rose more than three times faster than the rate of inflation, even accounting for manufacturer discounts.
In a novel study, researchers from the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh’s Health Policy Institute (PA, USA) have determined that, despite manufacturer discounts, the net costs of prescription drug prices rose significantly more rapidly compared with the rate of inflation between 2007 and 2018.
Lead study author Inmaculada Hernandez (University of Pittsburgh) explained: “In prior work, we observed that prices of drugs more than doubled in the last decade. However, this prior research was based on list prices, so it did not account for manufacturer discounts, which have also increased in the past few years.”
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In this study, researchers employed revenue and usage data to monitor the list and net (list price minus manufacturer discounts, including rebates and coupons) prices of 602 common, brand-name drugs between 2007 and 2018.
Over the course of the study period, investigators determined that inflation-adjusted list and net prices of branded pharmaceutical rose by 159% and 60% respectively, with large variation across drug classes for specific indications. At the same time, discounts paid by Medicaid and other payers increased by 36% and 28% respectively.
Researchers estimated that increases in payer discounts offset approximately 62% of observed increases in list prices, however, substantial increases in list prices remained.
Talking exclusively to The Evidence Base®, Hernandez stated: “This evidence is important in advancing the current policy debate around drug prices because it shows that drug prices still increase substantially after accounting for discounts.”
“Moreover, the widening gap between list and net prices may be increasing disparities in health care access, because under-insured and uninsured patients are exposed to list prices,” concluded Hernandez.
Hernandez I, San-Juan-Rodriguez A, Good CB, Gellad WF. Changes in list prices, net prices, and discounts for branded drugs in the US, 2007-2018. JAMA. 323(9), 854–862 (2020); www.upmc.com/media/news/030320-hernandez-gellad-jama-net-prices