Value-Based Pricing of US Prescription Drugs :  Estimated Savings Using Reports From the Institute for Clinical and Economic Review

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Abstract

This cross-sectional study estimates how annual US drug spending would change if prices for prescription drugs were set at the value-based price.

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Changes in List Prices, Net Prices, and Discounts for Branded Drugs in the US, 2007-2018

Inmaculada Hernández, Alvaro San-Juan-Rodriguez, Chester Good … (2020)

To what extent have manufacturer discounts offset increases in list prices of branded pharmaceutical products in the US? Using 2007-2018 net pricing data on branded pharmaceutical products in the US, list prices increased by 159% and net prices increased by 60%. Discounts increased from 40% in 2007 to 76% in 2018 in Medicaid and increased from 23% to 51% in other payers, offsetting 62% of increases in list prices for drugs. Although discounts partially offset list price increases of branded products from 2007 to 2018, there was still a substantial increase in net prices over this period. Most studies that have examined drug prices have focused on list prices, without accounting for manufacturer rebates and other discounts, which have substantially increased in the last decade. To describe changes in list prices, net prices, and discounts for branded pharmaceutical products for which US sales are reported by publicly traded companies, and to determine the extent to which list price increases were offset by increases in discounts. Retrospective descriptive study using 2007-2018 pricing data from the investment firm SSR Health for branded products available before January 2007 with US sales reported by publicly traded companies (n = 602 drugs). Net prices were estimated by compiling company-reported sales for each product and number of units sold in the US. Calendar year. Outcomes included list and net prices and discounts in Medicaid and other payers. List prices represent manufacturers’ price to wholesalers or direct purchasers but do not account for discounts. Net prices represent revenue per unit of the product after all manufacturer concessions are accounted for (including rebates, coupon cards, and any other discount). Means of outcomes were calculated each year for the overall sample and 6 therapeutic classes, weighting each product by utilization and adjusting for inflation. From 2007 to 2018, list prices increased by 159% (95% CI, 137%-181%), or 9.1% per year, while net prices increased by 60% (95% CI, 36%-84%), or 4.5% per year, with stable net prices between 2015 and 2018. Discounts increased from 40% to 76% in Medicaid and from 23% to 51% for other payers. Increases in discounts offset 62% of list price increases. There was large variability across classes. Multiple sclerosis treatments (n = 4) had the greatest increases in list (439%) and net (157%) prices. List prices of lipid-lowering agents (n = 11) increased by 278% and net prices by 95%. List prices of tumor necrosis factor inhibitors (n = 3) increased by 166% and net prices by 73%. List prices of insulins (n = 7) increased by 262%, and net prices by 51%. List prices of noninsulin antidiabetic agents (n = 10) increased by 165%, and net prices decreased by 1%. List price increases were lowest (59%) for antineoplastic agents (n = 44), but discounts only offset 41% of list price increases, leading to 35% increase in net prices. In this analysis of branded drugs in the US from 2007 to 2018, mean increases in list and net prices were substantial, although discounts offset an estimated 62% of list price increases with substantial variation across classes. This study describes changes in list prices, net prices, and discounts for branded pharmaceutical products in the US between 2007 and 2018 and estimates the extent to which list price increases were offset by increases in discounts.

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Making Medicines Affordable: A National Imperative

Engineering National Academies of Sciences, National Academy of Sciences (2018)

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Author and article information

Journal

Journal ID (nlm-ta): JAMA Health Forum

Journal ID (iso-abbrev): JAMA Health Forum

Title: JAMA Health Forum

Publisher: American Medical Association

ISSN (Electronic): 2689-0186

Publication date (Electronic): 9 December 2022

Publication date Collection: December 2022

Publication date PMC-release: 9 December 2022

Volume: 3

Issue: 12

Electronic Location Identifier: e224631

Affiliations

[1 ]Kaiser Permanente Washington Health Research Institute, Seattle

[2 ]The Comparative Health Outcomes, Policy, and Economics Institute, School of Pharmacy, University of Washington, Seattle

[3 ]Agency for Healthcare Research and Quality, Rockville, Maryland

Author notes

Article Information

Accepted for Publication: October 11, 2022.

Published: December 9, 2022. doi:10.1001/jamahealthforum.2022.4631

Corresponding Author: Kai Yeung, PharmD, PhD, Kaiser Permanente Washington Health Research Institute, Metropolitan Park East, 1730 Minor Ave, #1600, Seattle, WA 98101 ( kaiy@ 123456u.washington.edu ).

Author Contributions: Dr Yeung had full access to all the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: Yeung, Sullivan.

Acquisition, analysis, or interpretation of data: All authors.

Drafting of the manuscript: Yeung, Bloudek, Sullivan.

Critical revision of the manuscript for important intellectual content: All authors.

Statistical analysis: Yeung, Ding, Sullivan.

Obtained funding: Yeung.

Administrative, technical, or material support: Yeung, Bloudek, Ding.

Supervision: Yeung, Sullivan.

Conflict of Interest Disclosures: Dr Yeung reported a contract with the Institute for Clinical and Economic Review to review the clinical and economic value of a treatment not included in this research study. Dr Bloudek reported research support from AbbVie, Bayer, Astellas, BeiGene, Biodesix, Esperion, Genentech, Incyte, Neurocrine Biosciences, Novo Nordisk, Pfizer, Puma Biotechnologies, Roche, Seagen, Sunovion, Takeda Pharmaceutical, Agios, Cognoa, GlaxoSmithKline, Impel, and Nanoscope Therapeutics, all outside the submitted work. Dr Sullivan reported membership on the Institute for Clinical and Economic Review external advisory board. No other disclosures were reported.

Funding/Support: This research was supported by a grant from the Patrick and Catherine Weldon Donaghue Medical Research Foundation’s Greater Value Portfolio Program.

Role of the Funder/Sponsor: The funder had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

Article

Publisher ID: ald220038

DOI: 10.1001/jamahealthforum.2022.4631

PMC ID: 9856524

PubMed ID: 36484998

SO-VID: 579b431c-949c-4575-9217-e6bf0537a151

License:

This is an open access article distributed under the terms of the CC-BY License.

History

Date received : 25 July 2022

Date accepted : 11 October 2022

Funding

Funded by: Patrick and Catherine Weldon Donaghue Medical Research Foundation

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