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New GAO Study: Lack of competition helping
drive ‘extraordinary’ Brand-Name Drug Price
Increases
PCMA: Accelerate competition to lower costs,
increase access
WASHINGTON--Jan. 8, 2010 (BUSINESS WIRE)--A new report
from the Government Accountability Office
(GAO) that finds “extraordinary price
increases” for brand-name drug products from
2000 – 2008 was largely fueled by the “lack
of therapeutically equivalent drugs” and
“limited competition,” underscores the need
for policymakers to promote policies in
health reform which increase competition and
lower costs, the Pharmaceutical Care
Management Association (PCMA) said today.
“History shows that companies – including
drug companies – raise prices when they
don’t face competition and lower prices when
they do. That’s why consumers have saved
literally hundreds of billions of dollars
since the Hatch-Waxman law first allowed
generic drugs to compete with their
brand-name counterparts 26 years ago”
“History shows that companies – including
drug companies – raise prices when they
don’t face competition and lower prices when
they do. That’s why consumers have saved
literally hundreds of billions of dollars
since the Hatch-Waxman law first allowed
generic drugs to compete with their
brand-name counterparts 26 years ago,” said
PCMA President and CEO Mark Merritt.
“Now it’s time to take the next step and
allow affordable generics to compete with
expensive biotech medicines. It’s also time
to scrap ‘protected drug class’ laws which
protect ‘me-too’ drug makers from having to
compete with one another in Medicare. These
reforms alone would save billions and
address the root cause of higher drug
costs.”
Key findings from the GAO report include:
The number of extraordinary price increases
each year more than doubled from 2000 to
2008 and most of the extraordinary price
increases ranged between 100 percent and 499
percent.
Almost 90 percent of all brand-name drug
products that had an extraordinary price
increase sustained the new higher price – by
either having another increase in price or
remaining at the increased price.
PCMA represents the nation’s pharmacy
benefit managers (PBMs), which improve
affordability and quality of care through
the use of electronic prescribing
(e-prescribing), generic alternatives,
mail-service pharmacies, and other
innovative tools for 210-plus million
Americans.
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