Trends and Determinants of Retail Prescription Drug Costs. Health services research Teasdale, B., Nguyen, A., van Meijgaard, J., Schulman, K. A. 2022


OBJECTIVE: To characterize price trends and variation for U.S. 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: U.S. 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 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.

View details for DOI 10.1111/1475-6773.13961

View details for PubMedID 35211965