The price index for a group of 100 commonly used prescription drugs increased at an average annual rate of 6.6% from 2006 through the first quarter of 2010, compared with an average increase of 3.8% in the medical consumer price index, which measures the costs of medical goods and services, according to a new Government Accountability Office audit.
Dems hail reform's impact on drug costs
Prescription drug spending in 2009 was about $250 billion, of which $78 billion, or 31%, was spent by the federal government, the GAO found. The report also noted that “some media reports suggested that prescription drug prices may have increased more during the debate leading up to passage of the Patient Protection and Affordable Care Act” compared with recent years, but the report's findings showed that the increase in the price index from the first quarter of 2009 through the first quarter of 2010—before the bill passed—was 5.9%, which was less than the increase in the two prior years, but still higher than in 2006.
Auditors evaluated different baskets of drugs, and found that when shifts in consumer use between brand-name and generic versions of the same drug were included in the analysis of one basket, the price index increased at 2.6% per year, much lower than the 6.6% annual increase when those shifts weren’t used.
“Any analysis of prices must take into account the mix of brand and generic medicines that patients actually use,” John Castellani, president and CEO of the Pharmaceutical Research and Manufacturers of America, said in a news release. “Nearly 80% of all prescriptions are filled with generic drugs,” he said, adding that reports that ignore this fact exaggerate drug pricing trends and don’t acknowledge that innovators’ investments in new brand medicines that lead to generics are used broadly by patients at low cost.
Democrats on Capitol Hill used the findings to praise the provisions included in the reform law. “This new report also shows the importance of the benefits we provided to seniors when we closed the Part D drug doughnut hole in the healthcare reform law,” Rep. Henry Waxman (D-Calif.), ranking member of the House Energy and Commerce Committee, said in a news release accompanying the report. After the law, seniors will get “some protection from drug-price hikes and save over $500 in 2011,” Waxman added.
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