Trends and determinants of retail prescription drug costs

Abstract

Objective To characterize price trends and variation for US generic and branded drugs at the retail level as they relate to pharmacy acquisition costs and local market factors. Data Sources Drug pricing data consisting of US pharmacy claims from 2014 to 2019 collected and licensed by GoodRx, an online tool for comparing drug prices. Study Design Time trends of median drug prices and coefficients of variation were measured for generic and branded drugs, including subgroups based on clinical condition (i.e., diabetes and cancer). Pharmacy competition was measured using the Herfindahl–Hirschman Index (HHI) at the zip‐code level. Multivariable linear regression analysis assessed the impact of local market‐level factors on drug prices and variation. Data Collection US drug pricing data consisting of claims filled through a mix of public and private insurance at 58,332 chain and independent pharmacies across 14,421 zip codes in all 50 states. Principal Findings From 2014 to 2019, pharmacy retail markets trended towards greater competition: average HHI by zip code decreased by 15.0% (p < 0.001). Median cash price increased significantly for both generic (6.58%, p < 0.001) and branded (84.10%, p < 0.001) drugs. When normalized to acquisition costs, cash prices for generic drugs rose 22.03% (p < 0.001) while those of branded drugs decreased by 2.31% (p < 0.001). Diabetes drugs showed higher baseline overall markup of cash prices relative to acquisition costs (10.54, Interquartile range (IQR) 3.28–18.43) than cancer drugs (1.88, IQR 1.36–3.08). Neither local pharmacy competition nor median income significantly predicted drug price or variation. Conclusion Measures of generic drug price and price variation are high despite decreased costs earlier in the pharmaceutical supply chain, defying expectations of what would happen in a competitive market. Efforts to bypass the pharmacy benefit model for generic drugs may offer consumers an opportunity for substantial savings.

The least costly pharmacy for cancer supportive care medications over time: the logistic toxicity of playing catch up

“…However, insured people are often also locked in to only using a specific network of pharmacies, since plans typically have preferred pharmacy contracts. We did not inflation-adjust prices since the data points were just 5 months apart — data suggest cash prices of generic drugs may be rising despite decreased costs earlier in the supply chain and competition [ 24 ]. Generic drug products had a median list price increase of 1% in January 2022, with 82% of generic products experiencing any price increase [ 25 ].…”

Complex Picture of Prescription Drug Discount Programs and Out-of-Pocket Costs in Cardiovascular Disease

“…For example, some have questioned the motives behind programs like GoodRx in how they ultimately achieve their pricing structure, and whether they are another type of pharmacy benefit manager middleman. 8 Third, many of the medications in discount programs are still expensive, in part driven by the high prices for branded medications or are not even available. 9 For example, even Cost Plus Drugs only contains 2 SGLT2 inhibitors, which cost between $50 and $250 per month out-of-pocket, and neither of these is currently one of the evidence-based SGLT2 inhibitors for heart failure with reduced ejection fraction.…”