According to a report published by pharmacy benefits manager Express Scripts, the price of brand-name prescription drugs is rising far faster than the inflation rate. The report was based on a random sample of six million Express Scripts members with prescription drug coverage. The report found that the price of brand-name medicines increased more than 13% from September 2011 to September 2012, which was more than six times the overall price inflation of consumer goods.
Meanwhile, the price of generic drugs has plummeted by nearly 22% during the same time period. Dr. Steve Miller, the chief medical officer of Express Scripts, said that the drop in the price of generics “represents low-hanging fruit for the country to save money on health care.”
The report was criticized by the Pharmaceutical Research and Manufacturers of America, the trade group representing brand-name manufacturers. The trade group said that the report was skewed by a handful of high-priced specialty drugs that are used by a small number of patients.
They also claimed that the report overlooked the crucial role of major drug makers. Josephine Martin, executive vice president of the group, said in a statement, “Without the development of new medicines by innovator companies, there would be neither the new treatments essential to progress against diseases nor generic copies.”
The growth of specialty drugs, which are used to treat diseases like cancer and multiple sclerosis, were cited in the report as a major reason for the increase in spending on branded drugs. The report found that all but one of the new medicines approved in the third quarter of this year were specialty drugs.
Many of these specialty drugs were approved to treat advanced cancers after other treatment methods had failed. Spending on specialty medicines rose almost 23% during the first three quarters of 2012, compared with the same period in 2011.
Stephen W. Schondelmeyer, a professor of pharmaceutical economics at the University of Minnesota, said the lofty price tags did not always match the potential benefits of many new drugs. Mr. Schondelmeyer, who also helps manage the drug benefit program for the University of Minnesota, said, “Increasingly it’s going to be difficult for drug-benefit programs to make decisions about coverage and payment and which drugs to include.”