Drug Pricing in the US

  • ID: 4421394
  • Report
  • Region: United States
  • 85 pages
  • Datamonitor Healthcare
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Drug prices in the US have been the subject of intense debate over the past 2-3 years, following a surge in spending on prescription medicines and steep price increases in some categories. Public support for government action to curb prices is widespread. President Donald Trump has vowed to intervene, and the federal government is expected to unveil pricing reform proposals during the second half of 2017. In the meantime, state legislatures are debating a slew of bills designed to address prescription drug prices and curb pharmaceutical spending, while in the private sector, other stakeholders are keen to exert more control over a pricing agenda that is currently dominated by manufacturers and pharmacy benefit managers.
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1 EXECUTIVE SUMMARY
  • Paying the price for unrivaled access to prescription drugs
  • Rebating has fueled a period of dramatic list price inflation
  • Winners and losers under the current system
  • Prospects for change
2 THE PRICING DEBATE RESURFACES
  • A familiar problem that never went away
  • Bibliography
3 PUBLIC SECTOR PRICES
  • Not so free in practice
  • Labyrinthine rules limit public purchasing and reimbursement prices
  • The public sector drugs bill is still rising rapidly
  • Bibliography
4 PRIVATE SECTOR PRICES
  • Where market forces truly do run free
  • PBMs - the pharmaceutical industry's main adversary
  • PBM pressure has driven a rebating arms race
  • Bibliography
5 THE REBATING BONANZA
  • A solution, or part of the problem?
  • List prices versus net prices: the gap becomes a gulf
  • List price hikes have been used to create headroom for rebates
  • Rebates soar, but net prices still comfortably outpace inflation
  • Resetting the drug pricing debate
  • Winners and losers under the current system
  • Bibliography
6 DRUG PRICE REFORM PROSPECTS
  • How might the drug pricing debate play out?
  • Public support for pricing intervention is strong
  • Public program prices and spending top the federal agenda
  • Federal inaction prompts states to begin legislating on prices
  • Market dynamics in the private sector begin to shift
  • Seeking “value for money”
  • Endgame scenarios
  • Bibliography
7 APPENDIX
  • About the author
  • Scope
  • Methodology
List of Tables
Table 1: Pharmaceutical share of total healthcare spending in the US, Canada, and the five major EU markets
Table 2: Per capita pharmaceutical spending in the US, Canada, and the five major EU markets
Table 3: Pharmaceutical share of total healthcare spending in the US, 2000-14
Table 4: Invoice and net price growth for protected brands in the US, 2011-16
Table 5: Price caps, discounts, and rebates to publicly funded health programs
Table 6: Statutory rebates and fees paid by manufacturers to public health programs, 2013-15
Table 7: Medicare and Medicaid enrollment and drug spending growth rates, 2014-15
Table 8: Forecast contribution of Medicare and Medicaid to national spending on prescription drugs, 2015-25
Table 9: Impact of prescription drug price spikes on Medicare gross spending, 2014-15
Table 10: Changes in gross unit cost of best-selling Medicare drugs, 2015
Table 11: PBM market shares by prescriptions managed, 2015
Table 12: Number of products excluded from standard national formularies operated by leading PBMs, 2012-17
Table 13: New-generation hepatitis C drugs in the Express Scripts standard formulary, 2017
Table 14: Value of commercial rebates and patient cost-sharing assistance for branded drugs, 2013-15
Table 15: Relative impact of rebates on leading US manufacturers, 2007-14
Table 16: Impact of rebates on AstraZeneca's US business, 2005-16
Table 17: Growth in the value of rebates and discounts on branded prescription drugs, 2013-15
Table 18: The widening gap between AstraZeneca's gross and net US product sales, 2005-16
Table 19: List price growth of leading prescription drug brands, 2011-15
Table 20: Average US list and net price growth reported by three leading companies, 2012-16
Table 21: Key drug pricing issues and possible solutions
Table 22: Public support for measures to keep prescription drug costs down
Table 23: Differences in the pharmacy price of prescription drugs in the US and Canada, 2016
Table 24: Health plan interest in entering into outcomes-based contracts with manufacturers
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