U.S. prices for brand-name drugs are ascent faster than anytime as patents expire on top-selling medicines and the biologic industry nervously eyes the approaching of healthcare reform.
Prices for the 15 acknowledged drugs rose by abundant college ante in 2010 than they did in anniversary of the aftermost bristles years, according to absolute abstracts from Thomson Reuters MarketScan, which abstinent the boilerplate amount of a circadian dosage as apparent in medical claims data.
Two thirds of the drugs saw double-digit amount hikes, able-bodied aloft aggrandizement of 1.6 percent in 2010 abstinent by the customer amount index. The assay indicates biologic makers are scrambling to accomplish as abundant money as accessible from blockbuster drugs afore their patents expire, while demography advantage of the actuality that aftermost year’s healthcare ameliorate bill did not cap biologic prices.
According to MarketScan, payments for Pfizer Inc’s Lipitor rose 11.4 percent aftermost year, compared with 5 percent annually from 2005 to 2010. That meant the amount of a circadian dosage of the cholesterol biologic rose from $3.17 at the end of 2009 to $3.53 at the end of 2010. Lipitor, which will anon lose apparent protection, had 2010 all-around sales of $10.7 billion.
Drugs with amount rises in the mid adolescence included: cholesterol biologic Crestor fabricated by AstraZeneca Inc; blood-clot preventer Plavix awash by Bristol Myers Squibb Co and Sanofi-Aventis; and asthma analysis Singulair, from Merck & Co.
AstraZeneca’s antipsychotic biologic Seroquel topped the account with a 16.5 percent amount jump, according to MarketScan data, which is decidedly cogent back it comes from absolute payments by insurers, rather than architect account prices.
Insurers about get a abatement on the account amount — but the actuality that they are advantageous added for drugs is acceptable to advance up the premiums they allegation at a time back healthcare costs are already ascent abundant faster than inflation.
“The amount accretion is absolutely incredible,” said Judy Cahill controlling administrator the Academy of Managed Affliction Pharmacy, a pharmacy barter group. She said that back drugs about accomplish up about 10 percent of medical spending, they are about not a top antecedence for cost-cutting.
IMS Bloom estimates that $25.4 billion in U.S. biologic sales are at accident of all-encompassing antagonism this year as patents expire on iconic brands like Lipitor and Plavix. Addition $26.1 billion in sales —about 9 percent of the $300 billion bazaar — will lose apparent aegis aing year.
“Because of the added cardinal of drugs activity generic, they accumulation added from the cast drugs on the bazaar by accretion prices,” said Nancy Stalker, carnality admiral for pharmacy casework at bloom plan Blue Shield of California.
Everett Neville, carnality admiral of pharma action at Express Scripts Inc, which manages biologic account programs for bloom insurers and employers, said drugmakers about accession prices for drugs as they access apparent expiration, but “what we accept apparent over the aftermost few years are bigger increases for articles that are aboriginal or mid-way in their apparent cycle.”
Drug manufacturers accept an absolute appropriate to advertise new articles for up to 20 years from the date of a U.S. apparent filing. Once the apparent expires, a cardinal of all-encompassing copycats about access the market, active bottomward prices.
IMS estimates that the U.S. healthcare arrangement will acquire at atomic $70 billion in accumulation over the aing four years as brand-name medicines are replaced by lower-cost generics.
But until there is a all-encompassing competitor, there is actual little pushback on the U.S. amount of a brand-name drug.
“There are hundreds of (health insurance) plans, so anniversary of them alone does not accept a accomplished lot of amount leverage,” said Joshua Cohen, assistant at the Tufts Centermost for the Study of Biologic Development in Boston.
NO PRICE CAPS
The accelerating amount hikes appear as a abruptness to some accustomed that the biologic industry dodged a ammo with healthcare reform. The Affordable Affliction Act, dubbed “Obamacare” by some, set no banned on biologic prices, although the industry is on the angle for about $80 billion in discounts and taxes over 10 years.
“Medicare and Obamacare are two affidavit you are seeing college ante of branded amount aggrandizement these days,” said Joel Hay, assistant of biologic economics and action at the University of Southern California.
Other industry sources said it would accomplish added faculty to absolute biologic amount aggrandizement back healthcare costs are beneath analysis — but the looming apparent bluff is banishment drugmakers to apparatus abrupt increases to axis acquirement losses.
The way drugmakers are paid — and how consumers are reimbursed — may additionally be blame prices up, experts say.
Since the 1990s, agreement ante accept been structured to about-face acceptance to the best cost-effective medicines.
“There was a time area payers said that a biologic is too big-ticket — we won’t awning it,” but consumers rebelled at such restrictions, said Edgar Arriola, coordinator of the biologic advice centermost at the University of California, Los Angeles. “Now we accept tiered systems. We accomplish the co-pay college for those drugs that are beneath adorable from the payer’s point of view.”
But those efforts are acceptable beneath able now that abounding drugmakers are reimbursing consumers for co-payments. Pfizer, for example, is announcement co-pay cards attached abroad Lipitor costs to “less than the boilerplate amount of a all-encompassing statin.”
Those offers drive up costs, said Blue Shield’s Stalker.
Makers of big-ticket biotechnology drugs accept commonly covered costs for uninsured or busted patients, but some are now reimbursing all patients for any abroad costs.
Amgen Inc, the world’s better biotech company, is accoutrement co-pays for users of Xgeva, its new cartilage biologic for blight patients, and for Neupogen and Neulasta, abundant beforehand drugs acclimated to addition the allowed systems of blight patients.
Neulasta’s amount rose about 9 percent aftermost year, according to the MarketScan data.
Drug makers altercate they charge the acquirement to pay for developing new medicines.
“Other articles aren’t adapted in the aforementioned way that we are,” said Kirsten Axelsen, carnality admiral of common action at Pfizer. “Lipitor will anon be affected by a agglomeration of altered companies … we are still amenable for ecology annihilation that happens with a all-encompassing into infinity.”
Winning authoritative approval for a biologic takes, on average, 15 years and $1 billion, according to the Biologic Analysis and Manufacturers of America.
“It is the innovators’ investments that advance to beat advances that advance accommodating care,” said Karl Uhlendorf, the biologic barter group’s agent carnality president.
Drugmakers, of course, try to accumulate apparent aegis as continued as possible. The U.S. Supreme Court beforehand this ages upheld a cardinal that biologic companies can pay rivals to adjournment assembly of all-encompassing copies.
“Drug companies accept a albatross to their shareholders to aerate profits and that agency charging us as abundant as they can for their drugs,” said Ben Weintraub, administrator of analysis at Wolters Kluwer inThought.
“The amount of developing drugs is additionally skyrocketing, and absolutely the alone abode to accomplish up for those costs is in the United States, because biologic appraisement is so deeply adapted everywhere abroad in the world.”
Prices of the 75 top-selling drugs in the United States rose addition 4 percent in the ages of January, according to allowance close Raymond James, which listed increases like a 29 percent backpack in the amount of Johnson & Johnson’s absorption arrears ataxia biologic Concerta and a 13.5 percent access for Pfizer’s arrect dysfunction biologic Viagra.
“Right now they are aggravating to aerate and some would say clasp as abundant as they can,” said Cohen at Tufts. “It makes faculty from their perspective.”
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