Wednesday, April 3, 2013

Brand Drug Inflation and Generic drug deflation continue unabated in the US

  • Brand drug prices increased much faster than the overall inflation rate from December 2011 to December 2012, while generic prices plummeted. This pattern reflects the impact of the patent cliff—the wave of patent expirations for blockbuster drugs—and underscores the unprecedented opportunity to move patients to generic drugs when possible.
  • Brand inflation and generic deflation continue unabated. While the cost (in 2008 dollars) for an unchanged market basket of brand drugs rose from $100.00 to $165.44 between January 2008 and December 2012, the price for an unchanged market basket of generic drugs decreased from $100.00 to $57.38 (in 2008 dollars).
  • In stark contrast to the dramatic price changes experienced for brand and generic drugs since 2008, inflation as measured by the Consumer Price Index (CPI) across a broad market basket of goods and services – not just prescription drugs – has only fluctuated between 0.1% and 3.0% during the same time period.

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