Manufacturers Increase Drug Prices Twice as Fast During Drug Shortages
Prices of prescription drugs in short supply between 2015 and 2016 were found to increase more than twice as quickly as they would have in the absence of a shortage.
Prices of prescription drugs in short supply between 2015 and 2016 were found to increase more than twice as quickly as they would have in the absence of a shortage, according to the results of a study published in the Annals of Internal Medicine. Furthermore, prices increased more dramatically for drugs supplied by 3 or fewer manufacturers.
Inmaculada Hernandez, PharmD, PhD, of the University of Pittsburgh School of Pharmacy in Pennsylvania, and colleagues used the US Food and Drug Administration (FDA) drug shortages database to identify 617 National Drug Code numbers for 90 drug products. Whereas prices for all drugs increased by 7.3% and 16% for the 11 months before and after the shortage began, respectively, drugs supplied by 3 or fewer manufacturers increased by 12.1% and 27.4%, respectively, in the 11 months before and after the shortage began.
The authors contended that these price increases may represent the opportunistic behavior of manufacturers during shortages when demand increases the price patients are willing to pay, particularly for drugs vital to their health. However, because the authors used wholesale acquisition costs, they were unable to determine whether rebates increased in like fashion, although they expressed doubts that rebate increases matched price increases.
The authors noted, however, that these results are in agreement with previous research on drug price increases during shortages, and they argue that these drug shortages and price increases represent a public health crisis that must be addressed by policymakers. They further contend that if manufacturers are found to use shortages to increase prices, public payers could set payment caps for drugs in short supply and restrict price increases to those predicted to occur in the absence of a shortage.
Hernandez I, Sampathkumar S, Good CB, Kesselheim AS, Shrank WH. Changes in drug pricing after drug shortages in the United States [published online September 18, 2018]. Ann Intern Med. doi:10.7326/M18-1137.