Prices have risen dramatically on an ever-increasing number of prescription medications over the majority of the last decade. The price hikes stem from continued consolidation of companies in the drug industry that has led to less competition in the marketplace, as fewer and fewer companies manufacture the drugs.
A new report issued by the Government Accountability Office (GAO) has revealed that between the years of 2000 and 2008, the number of brand-name drugs with price increases of 100 percent have more than doubled. The study, titled “BRAND-NAME PRESCRIPTION DRUG PRICING: Lack of Therapeutically Equivalent Drugs and Limited Competition May Contribute to Extraordinary Price Increases” summarily says it all.
Congressional investigators say the soaring prices among 416 brand-name drug products are due in part to industry consolidation, but also in combination with such factors as implementation of price increases by third-party suppliers who repackage drugs for patients. In fact, according to the GAO report, more than half of the price jumps came from suppliers. These suppliers include HMOs and pharmacies, as well as stand-alone companies.
According to the GAO report, "Proponents of repackaged drugs believe that they offer convenience to patients and may reduce medication errors. However, some experts suggest that repackaging drugs may unnecessarily increase drug prices and profits." In addition, the study report points out that for certain niche medications there is just not enough competition in the marketplace to force prices downward. As consolidation continues across the drug industry, entire groups of similar drugs have been bought out, allowing for larger companies to “monopolize” the drugs and charge higher prices for them. The majority of the drug price hikes range from 100 to 499 percent, with several exceeding a whopping 1,000 percent.
Although most of the drugs affected are specialty drugs, almost one-third of are used in the treatment of anxiety, depression, and various disorders of the central nervous system. Others include medications used to treat infections or cardiovascular conditions. Among the name brands found to have undergone major price jumps were Adderall, used to treat attention deficit disorder, Sumycin for infections, and Inderal for chest pain, as well as Bayer’s antibiotic Cipro, and Eli Lilly’s Zyprexa used in the treatment of schizophrenia.