Report: US branded drug prices increase, generic prices decline

A report released Wednesday by Express Scripts revealed that the prices of popular branded drugs increased by 13.3 percent between September 2011 and September 2012. Meanwhile, the prices of generic drugs decreased by 21.9 percent over the same period, in part due to the release of generic versions of Pfizer's Lipitor and Bristol-Myers Squibb and Sanofi's Plavix.

The net inflationary difference between branded and generic drug prices of 35.2 percentage points is reportedly the largest gap since Express Scripts began calculating its Prescription Price Index in 2008. "The big takeaway from this for me is actually not so much that we have ongoing brand inflation, because we've always had that, though it's larger than usual," said Express Scripts chief medical officer Steve Miller. "What's really remarkable is the gap (between branded drug prices and generics) is getting larger because of the number of generics and the discounts on those generics are steep," Miller added.

The data showed overall spending on prescription drugs rose 3.5 percent over the first nine months this year, compared with the same period last year. This is above the 2.7 percent growth recorded for all of 2011, but the lowest rate of spending growth Express Scripts had reported in nearly two decades of tracking such data, the company noted. Miller said the spending increase remains "relatively muted."

The report also indicated that spending on specialty drugs such as cancer, rheumatoid arthritis and multiple sclerosis treatments increased by 22.6 percent during the first three quarters of 2012 compared to the year-ago period. The spending on specialty drugs, which currently accounts for about 21 percent of total pharmacy spending, was fuelled by a 117.3-percent increase in spending on treatments for hepatitis C. The company said it sees specialty drugs rising another 10 percent by 2014.

For further analysis, read ViewPoints: US/EU drug pricing divide – larger than ever?

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