Inflation for Popular Brand Name Drugs Far Outpaces General Inflation

Since September 2011, price inflation for the most highly utilized brand-name medications was more than six times greater than overall economic price inflation for consumer goods, according to the ExpressScripts Prescription Price Index. Prices for these medications increased 13.3% from September 2011 to September 2012 while overall economic inflation was only 2%. Meanwhile, prices of generic medications declined 21.9%. This is the largest widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.

Steve Miller, M.D., chief medical officer at Express Scripts said, “The patent cliff has fueled a growing price disparity between brand-name and generic medications. The trend emphasizes the nation’s continued need for the tools we employ to help patients make better decisions, including generic use when appropriate.”

During the first three quarters of 2012, spending on traditional medications decreased 0.6% over the same period in 2011, primarily because of lower prices brought on by a growing use of generic medications. The top traditional therapy class is for mental and neurological disorders (including antidepressants), which consumes 24.7% of all traditional drug spending. Total spending in this class is down 1.9% due to newly available generic antidepressants and antipsychotics.

Total spending on medications to treat high blood pressure and high cholesterol decreased 7.7%, primarily driven by patent expirations on blockbuster drugs.

During the first three quarters of 2012, spending on specialty medications increased 22.6%. In the first nine months of 2012, specialty drug costs consumed 20.8% of total pharmacy spending. Dr. Miller said, “The continued rise in spending on specialty medications underscores the nation’s need to accelerate the pathway for biosimilars. Additional competition within these therapy classes would provide a necessary market control against price inflation.”  The three therapy classes with the highest specialty drug spending are rheumatoid arthritis/autoimmune conditions, multiple sclerosis, and cancer.

Medications commonly used to treat hepatitis C had the largest specialty spending increase of 117.3%. Increased utilization is driving this trend as new patients are treated with one of two new medications. Eight of the nine notable new medications approved in the third quarter are specialty medications. Many are second-line and third-line drugs used to treat advanced cancers. The complete Drug Trend Quarterly is available at DrugTrendReport.com.

Last Updated 7/11/2017

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