Competition has done little to keep the lid on rising pharmaceutical prices for brand-name products, especially insulins and anti-inflammatory drugs, and costs will continue to rise unless action is taken, according to a recent paper written by researchers from the Scripps Research Translational Institute.
Competition has done little to keep the lid on rising pharmaceutical prices for brand-name products, especially insulins and anti-inflammatory drugs, and costs will continue to rise unless action is taken, according to a recent paper written by researchers from the Scripps Research Translational Institute.
The economic evaluation of drug prices, published in JAMA Network Open, focuses on 49 top-selling US brand-name drugs with more than $500 million in US sales or $1 billion in worldwide sales.
The paper, written by Nathan E. Wineinger, PhD, Yunyue Zhang, BA, and Eric J. Topol, MD, the founder of the institute, says costs of brand-name drugs have risen substantially in the past 6 years, with regular increases occurring 1 to 2 times per year, usually at the beginning of the calendar year and then again in midyear. In addition, they wrote that their data suggest that the current rebate system increases overall costs by incentivizing high list prices.
Price increases were led by analog insulins Novolog and Humalog as well as the basal insulin Lantus, along with anti—tumor necrosis factor (anti-TNF) drugs etanercept, sold as the blockbuster rheumatoid arthritis drug Enbrel, and adalimumab, Humira. Both types of drugs more than doubled in cost.
A previous report has shown similar increases in the cost of insulin.
The authors obtained pharmacy claims data from January 1, 2012, through December 31, 2017, from Blue Cross Blue Shield Axis, a database that includes data from more than 35 million individuals with private pharmaceutical insurance.
The primary outcome was the median sum of out-of-pocket (OOP) and insurance costs paid by patients or insurers, both annually and monthly.
In total, 132 brand-name prescription drugs were identified in 2017 that met the inclusion criteria. Of those, the study focused on 49 top-selling drugs that exceeded 100,000 pharmacy claims.
Substantial cost increases among these drugs was near universal, with a 76% median cost increase from January 2012 through December 2017; 98% of the drugs had regular annual or biannual price increases.
Of the 36 drugs that have been available since 2012, 78% have seen an increase in insurer and OOP costs by more than 50%, and 44% have more than doubled in price.
Insulins (eg, Novolog, Humalog, and Lantus) and anti-TNF agents (eg, Humira and Enbrel) demonstrated highly synchronized price increases, coinciding with some of the largest growth in drug costs.
Relative price changes did not differ between drugs that entered the market in the past 3 to 6 years and those that have been on the market longer (number of drugs, 13 vs 36; median, 29% increase from January 2015 through December 2017; P = .81)
Relative price changes also did not differ between drugs with or without an approved generic or biosimilar (number of drugs, 17 vs 32; median, 79% vs 73%; P = .21).
Despite an increase in the proportion of lower-cost generic drugs prescribed, pharmaceutical drug net spending reached $324 billion in 2017 and is expected to increase 2% to 5% annually over the next 5 years. Brand-named drugs are launching at higher prices and are granted market exclusivity through the US patent system, the authors note.
For instance, both Enbrel and Humira have approved biosimilar options that have not launched due to patent litigation.
One limitation of the study is the lack of information on rebates and how they affected net prices. Rebates are issued in bulk and cannot be linked to individual claims. To get around the limitation, the authors obtained third-party estimates of net price data on each drug.
Changes in prices paid were highly correlated with third-party estimates of changes in drug net prices (ρ = 0.55; P = 3.8 × 10−5), suggesting that the current rebate system, which incentivizes high list prices and greater reliance on rebates, increases overall costs.
The authors called for greater transparency, given that increases in list prices, and subsequent increases in insurer and OOP costs paid, apear to coincide with increases in net prices, making the drugs more expensive overall.
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