Health Insurance Daily

Relatively Few Prescription Drugs Drive Price Increases

In a recent report to Congress, the Government Accountability Office (GAO) examines the change in retail prices and other pricing benchmarks for drugs frequently used by Medicare beneficiaries and other individuals with health insurance from 2000 through 2004. The GAO prepared the report in anticipation of the Jan. 1, 2006, effective date of the new Medicare Part D prescription drug benefit.

According to the GAO, "We found the average usual & customary (U&C) prices at retail pharmacies reported by two state pharmacy assistance programs for a 30-day supply of 96 drugs frequently used by Blue Cross Blue Shield Federal Employee Health Benefits Program Medicare and nonMedicare enrollees increased 24.5% from January 2000 through December 2004." The GAO found that of the 96 drugs:

• Twenty drugs accounted for nearly two-thirds of the increase in the U&C price index.
• The increase in average U&C prices for 75 prescription drugs frequently used by Medicare beneficiaries was similar to the increase for 76 prescription drugs frequently used by nonMedicare enrollees.
• The average U&C prices for 50 frequently used brand prescription drugs increased three times as much as the average for 46 generic frequently used prescription drugs.

The GAO goes on to conclude, "average wholesale prices (AWP) increased at a faster rate than average manufacturing prices (AMP) and U&C prices for the 50 frequently used brand drugs from first quarter 2000 through fourth quarter 2004.

Ten drugs in each index accounted for almost 50% of the increase for AMP, AWP, and U&C prices. Eight of these ten drugs were consistent across the three price indexes."

To read this article in its entirity, click on Aspen Publishers' Benefits Reports.

posted by Mike @ 11:10 AM