Rise in the Price of Prescription Drugs
According to the investment bank Barclays Capital, there will be a rise of 6-9% on brand name drugs. Barclays Capital analyzed the prices of 130 top-selling drugs. According to the study, Benicar, a blood pressure pill, had the biggest jump in price by 29.3%. In addition, Lipitor rose by 12.4% and Plavix rose by 13.2%.
This increase in prices reflects the industry’s efforts to work against the efforts of government and commercial health plans to control costs on medications as well as to make up revenue on brand drugs that will soon be losing their patent protection.
Typically, health plans negotiate rebates to lower their cost. Rebates for private health plans average 14.3% on a brand drug. Over the past year, drug prices have negatively impacted revenue when rebates and discounts are considered. Drug companies are preparing for a fall in revenue as firms lose their exclusive rights to produce specific drugs due to patents expiring.
Between 2002 and 2009, drug prices have gone up an average of $58.96 per prescription while rebates for private health plans went up by $12.57. In 2008, about $7,681 was spent by US health care per resident. In the US, prescription drugs have about $300 billion in yearly sales and prices are still rising! Brand name drug prices are becoming more expensive than any other medical goods or services.
Top-selling drug firms are preparing to compete against generic drugs when their patent ends. When the patent ends, it is eligible to become a generic so a company can sell discount prescription drugs. A generic drug contains the exact same ingredients, has the same dosage, and has the same side effects; the only differences are that the generic version will look different and is much cheaper! For example, you could choose to buy Tylenol, when it’s generic, acetaminophen, is actually more affordable.
Another way Americans are saving money is by buying drugs online from Canada. Drugs from Canada are 35-55% cheaper than in the US. Buying drugs such as Lipitor online from an online pharmacy is much more affordable than buying prescription drugs from a local US pharmacy.