The growing cost of brand-name prescription drugs is a concern for patients, payers and providers – particularly when price increases are large and sudden, says the Government Accountability Office.
The number of so-called annual extraordinary price increases more than doubled from 2000 to 2008, according to a recent GAO report, with those increases ranging from 100 percent to 499 percent.
The GAO was asked to examine extraordinary price increases for brand-name prescription drugs in a 2008 Congressional hearing by the Joint Economic Committee.
According to the GAO, most extraordinary price increases were on drugs priced less than $25 per unit – though a full course of treatment for some of these drugs could total several thousand dollars.
Based on interviews with experts and industry representatives, a lack of therapeutically equivalent drugs – both generics and other brand-name drugs used to treat the same condition – and limited competition may contribute to extraordinary price increases.
GAO officials reviewed drug pricing and other data from a pharmaceutical industry compendium and developed case studies of six brand-name prescription drugs identified from the analysis of drug pricing data. These drugs were selected based on factors including price and the percentage and number of price increases.
From 2000 to 2008, 416 brand-name drug products, representing 321 different drug brands, experienced extraordinary price increases. This represents half of 1 percent of all brand-name drug products.
According to the GAO, almost 90 percent of all brand-name drug products that showed an extraordinary price increase sustained the new price – by either increasing in price or remaining at the increased price. More than half of the brand-name drug products that saw extraordinary price increases were in three therapeutic classes – central nervous system, anti-infective and cardiovascular.
About half of the extraordinary price increases found were for brand-name drug products purchased from drug manufacturers or wholesalers, repackaged and resold in smaller packages to healthcare providers such as hospitals or physicians.