Tales of the Unsurprised: U.S. Brand-Name Drug Prices Fell for an Unprecedented Sixth Consecutive Year—And Will Fall Further in 2024 (rerun)
This week, I’m rerunning some popular posts while I prepare for today’s live video webinar: Drug Channel Implications of the Inflation Reduction Act.
One important update: In the article below, I suggested that the IRA will make high-list/high-rebate products less attractive to Medicare plans. But this appears not be accurate, as I explain in Surprise! Thanks to the IRA, Part D Plans Will Prefer High-List, High-Rebate Drugs.
Click here to see the original post from January 2024.
It's time for Drug Channels’ annual reality check on U.S. drug pricing.
For 2023, brand-name drugs’ list prices again grew at mid-single-digit rates. However, net prices dropped for an unprecedented sixth consecutive year. What’s more, after adjusting for overall inflation, brand-name drug net prices plunged by more than 7%. Details below.
Employers, health plans, and PBMs determine whether patients share in this ongoing deflation. Meanwhile, these data challenge drug pricing flat earthers (#DPFE) who remain committed to a false narrative of “skyrocketing” drug prices.
As I discuss below, manufacturers will face ongoing pressure on net prices from both commercial and government payers. They will also have new incentives to limit growth in list prices—and will even reduce list prices on certain drugs (as some are already doing).
Perhaps these factors will finally start to deflate the gross-to-bubble and reduce its negative effect on patients and public policy discussions. Hope has to triumph over experience eventually, doesn’t it?
One important update: In the article below, I suggested that the IRA will make high-list/high-rebate products less attractive to Medicare plans. But this appears not be accurate, as I explain in Surprise! Thanks to the IRA, Part D Plans Will Prefer High-List, High-Rebate Drugs.
Click here to see the original post from January 2024.
For 2023, brand-name drugs’ list prices again grew at mid-single-digit rates. However, net prices dropped for an unprecedented sixth consecutive year. What’s more, after adjusting for overall inflation, brand-name drug net prices plunged by more than 7%. Details below.
Employers, health plans, and PBMs determine whether patients share in this ongoing deflation. Meanwhile, these data challenge drug pricing flat earthers (#DPFE) who remain committed to a false narrative of “skyrocketing” drug prices.
As I discuss below, manufacturers will face ongoing pressure on net prices from both commercial and government payers. They will also have new incentives to limit growth in list prices—and will even reduce list prices on certain drugs (as some are already doing).
Perhaps these factors will finally start to deflate the gross-to-bubble and reduce its negative effect on patients and public policy discussions. Hope has to triumph over experience eventually, doesn’t it?
Posted by Drug Channels Institute, an HMP Global company on Friday, April 5, 2024
Labels: Gross-to-Net Bubble, Industry Trends, Costs/Reimbursement, PBMs
