June 26, 2019

The median total costs insurers and patients paid for the 49 most popular drugs in the United States, by sales, increased between 2012 and 2017, with many of those costs increasing more than twofold, according to a study recently published in JAMA Network Open.

Infographic: 5 ways to control the flow of drug expenditures

Study details

For the study, researchers from the Scripps Research Translational Institute analyzed pharmacy claims data from Blue Cross Blue Shield Axis, a database that has data on more than 35 million individuals with private pharmaceutical insurance. The researchers only looked at claims for prescription drugs that exceeded $500 million in U.S. sales or $1 billion in global sales and were filed from January 2012 to December 2017.

The researchers calculated the median sum of out-of-pocket and insurance costs paid by patients or insurers for the drugs. They then compared those costs with third-party estimates of the drugs' net prices to account for unknown rebates paid.

Drug list prices, total costs rise

The researchers found that, between January 2012 and December 2017, the median total costs of the 49 top-selling brand-name drugs increased by 76%, while the drugs' annual net prices increased by a mean of 9%. Of the 36 drugs that have been on the market since 2012, 28 of the drugs' median total costs increased by more than 50% and 16 of the drugs' relative prices more than doubled, the researchers found.

According to the researchers, insulin drugs, including Novolog and Humalog, and rheumatology drugs, including Humira and Enbrel, saw some of the largest median cost increases, which were highly associated with price increases for the drugs. For example, Humira's price rose from $1,940 in January 2012 to $4,338 in December 2017. The 10 drugs with the greatest median total cost increases, by percentage, were:

Discussion

The researchers wrote that their findings suggest the costs of popular brand-name drugs will double every seven to eight years. "Because most products displayed continual, marked annual increases throughout the observation window, we expect these products to continue along this price escalation course, along with emerging products," they wrote.

The researchers wrote that competition did little to reduce drug costs. "Instead, products that may be prescribed interchangeably ... were highly synchronized in relative cost changes while demonstrating some of the largest cost increases in the industry over the past [six] years," they wrote.

The researchers added that it is important for the federal government to look into patent abuses within the current pharmaceutical system. "The United States provides drug companies with the strongest patent protections in the world, but legal strategies in the pharmaceutical industry … abuse that liberty," they wrote. The researchers added, "Reasonable drug costs for consumers must be balanced with incentives in the pharmaceutical industry to produce innovative drugs that improve and save lives" (Owens, "Vitals," Axios, 6/3; Paavola, Becker's Hospital Review, 6/3; Charles, NBC News, 5/31; Wineinger et al., JAMA Network Open, 5/31).

Learn more: 5 ways to control the flow of drug expenditures

Prescription drug expenditures are the fastest growing component of health care spending. And while reducing unwarranted prescribing variation is the single biggest improvement opportunity, there are several other near-term chances to reduce spending and grow revenues.

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