HSGAC Report: Drug Prices Rise at 10 Times the Rate of Inflation

Last week, Senator Claire McCaskill, D-Missouri, together with the minority staff of the Senate Homeland Security and Government Affairs Committee (HSGAC), released a report on prescription drug price increases that affect the 20 products most commonly prescribed to seniors.

According to the report, which used data from CMS and the IQVIA National Sales Perspectives information service, prices increased over the last 5 years for all 20 drugs in question, which include the diabetes medications insulin glargine (Lantus) and insulin aspart (NovoLog).

On average, prices for these drugs increased by 12% every year for the past 5 years, a rate that is approximately 10 times higher than the average annual rate of inflation. The percent change in price between 2012 and 2017 ranged from a low of 31% (for the shingles vaccine Zostavax) to a high of 477% (for the brand-name nitroglycerin, Nitrostat).

According to the report, these continual increases in price are keeping healthcare costs high despite reduced use of many of these drugs; while prescriptions rose for treatments including the blood-thinner rivaroxaban (Xarelto) and the dry-eye drug cyclosporine (Restasis), many of the 20 most-prescribed drugs saw sharp declines in prescribing from 2012 to 2017; prescriptions for rosuvastatin (Crestor) dropped by 94%, and nitroglycerine by 93%, for example.

“These findings underscore the need for further investigation by the Committee and other policymakers into dramatic price spikes and their impact on healthcare system costs and financial burdens for the growing US senior population,” conclude the authors.

In a statement, McCaskill added, “Can you imagine if you went to an auto dealership and last year’s exact model was being sold at a [20%] mark-up, and then you went back the next year and it had happened again? That’s exactly what’s happening in the prescription drug industry, where the cost of identical drugs skyrockets year after year.”

Juliet Johnson, a representative of the Pharmaceutical Research and Manufacturers of America (PhRMA) told CNN that the document is “yet another misleading report that ignores the robust negotiation that occurs between Medicare Part D plans, middlemen and biopharmaceutical companies.” Johnson added that PhRMA agrees that “…more can be done to make Part D more affordable and predictable for seniors. One way to do that is to ensure seniors benefit from the significant negotiated savings when they pick up their medicine at the pharmacy.”