Specialty Drugs and Increase Price of Brand Names Raise Health Care Costs

MedicalResearch.com Interview with:

MedicalResearch.com Interview with: Inmaculada Hernandez, PharmD, PhD Assistant Professor of Pharmacy and Therapeutics University of Pittsburgh School of Pharmacy

Dr. Hernandez

Inmaculada Hernandez, PharmD, PhD
Assistant Professor of Pharmacy and Therapeutics
University of Pittsburgh School of Pharmacy

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: The objective of our study was to answer a research question of high policy relevance: to what extent are rising drug costs due to inflation in the prices of existing products versus the market entry of new, more expensive drugs.

We found that rising prices of brand-name drugs are largely driven by manufacturers increasing prices of medications that are already in the market rather than to the entry of new products.

In contrast, increases in costs of specialty and generic drugs were driven by the entry of new drugs.

MedicalResearch.com: What should readers take away from your report?

Response: We would like readers to recognize that, in the brand-name market, it is not new product entry but rather year-over-year increases in prices of drugs that have been around for a while what drives the increases in drug prices observed in the last decade. 

MedicalResearch.com: What recommendations do you have for future research as a result of this work?

Response: Given the fast changing nature of the pharmaceutical market, it will be important to repeat analyses using more recent data and evaluate the role of inflation vs new product entry on rising drug prices in the next decade, when most blockbusters will likely be specialty drugs, and when biosimilar hit the market.  Additionally, it will also be important to quantify the role of inflation vs new product entry in rising prices of drugs used in different states.

Disclosures: Shrank, Good and Parekh are employees of UPMC Insurance Services Division.

Citation:

The Contribution Of New Product Entry Versus Existing Product Inflation In The Rising Costs Of Drugs

Inmaculada Hernandez, Chester B. Good, David M. Cutler, Walid F. Gellad, Natasha Parekh, and William H. Shrank

Health Affairs 2019 38:1, 76-83

Jan 8, 2019 @ 10:55 pm 

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