Drug Pricing Still Rapidly Increasing, Despite Discounts

According to data on drug pricing presented in a poster session at AMCP Nexus 2019, despite discounts and rebates, list and net prices are still increasing rapidly.

Using data from the investment firm, SSR Health, researchers from the University of Pittsburg examined trends in list and net prices of branded drugs in the United States from 2007 to 2018, and estimated to what extent rising list prices have been offset by rising discounts

“SSR estimates net prices by compiling company-reported sales for each product, and dividing by the number of units sold in the United States. Outcomes included list and net prices, and gross-to-net discounts in Medicaid and in other payers,” explained the researchers.

Using that data, the researches explained that they calculated four outcome means for each year for sample of drugs in six therapeutic classes and weighted each product by utilization.

Based on those calculations, the researchers reported that list prices increased by 232%, an average of 12% year-over-year. Accounting for a 43% offset from discounts, net prices still increased 133%.

“Gross-to-net discounts increased from 40% in 2007 to 68% in 2018 in Medicaid, and from 22% to 50% in other payers,” explained the researchers.

Among the therapeutic classes, there were varying discounts, causing a range of increases. Multiple Sclerosis treatments saw a 407% list increase (221% net) from 2007 to 2018, insulin increased list prices by 337% (83% net), and list prices for tumor necrosis factor inhibitors tripled. 

The lowest list price increase offender was found to be antineoplastic agents, averaging 135% “with rebates only offsetting 34% of list price increases, yielding an average net price increase of 89%.”

Overall, researchers concluded that despite the offset 43% of list prices increase for branded drug products, net prices increased 4 times faster than general inflation.

This research was sponsored by the National Heart, Lung, and Blood Institute. —Edan Stanley