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This trend in prescription drug pricing outpaces growth in prices for other healthcare services.
New drugs increasingly are launched with higher prices than previous new drugs, according to a research letter recently published in JAMA. In fact, launch prices for new drugs increased by 20% per year from 2008 to 2021. In the period 2020 to 2021, alone 47% of new drugs were initially priced above $150,000 per year.
This trend in prescription drug pricing outpaces growth in prices for other healthcare services, investigators said.
“We found that prices for newly marked drugs have increased rapidly over the last decade, with disastrous consequences for patient access and affordability,” lead investigator Benjamin Rome, M.D., told Formulary Watch by email. “These trends really underscore the need for Congress to step in and start allowing Medicare to negotiate prices for new drugs, as is done by most other high-income countries.”
Rome is a health policy researcher at Harvard Medical School and a faculty member with the Program On Regulation, Therapeutics, And Law (PORTAL), Division of Pharmacology and Pharmacoeconomics in the Department of Medicine at Brigham and Women's Hospital.
Investigators evaluated trends in prices for newly marketed brand-name drugs between 2008 and 2021. They used SSR Health, a database with quarterly wholesale acquisition cost and estimated net prices after manufacturer discounts for more than 1,230 brand name products.
The included 548 of 576 drugs (95%) first marketed in 2008 and 2021, excluding three diagnostics and 25 drugs for which they could not estimate price per year.
The found that the highest prices were among drugs for rare diseases, with a median cost of $168,441 per year, and oncology drugs with a median cost $155,091 per year. Additionally, the proportion of drugs priced at $150,000 per year or more was 9% in the period 2008 to 2013 and 47% in 2020 and 2021.
Investigators noted a few limitations. The study was limited to drugs sold by public companies. Additionally, investigators said SSR Health net price tends to underestimate prices paid by payers.