(Washington, DC) — A new report from the Government Accountability Office (GAO) that finds “extraordinary price increases” for brand-name drug products from 2000 – 2008 was largely fueled by the “lack of therapeutically equivalent drugs” and “limited competition,” underscores the need for policymakers to promote policies in health reform which increase competition and lower costs, the Pharmaceutical Care Management Association (PCMA) said today.
“History shows that companies – including drug companies – raise prices when they don’t face competition and lower prices when they do. That’s why consumers have saved literally hundreds of billions of dollars since the Hatch-Waxman law first allowed generic drugs to compete with their brand-name counterparts 26 years ago,” said PCMA President and CEO Mark Merritt. “Now it’s time to take the next step and allow affordable generics to compete with expensive biotech medicines. It’s also time to scrap ‘protected drug class’ laws which protect ‘me-too’ drug makers from having to compete with one another in Medicare. These reforms alone would save billions and address the root cause of higher drug costs.”
Key findings from the GAO report include:
- The number of extraordinary price increases each year more than doubled from 2000 to 2008 and most of the extraordinary price increases ranged between 100 percent and 499 percent.
- Almost 90 percent of all brand-name drug products that had an extraordinary price increase sustained the new higher price – by either having another increase in price or remaining at the increased price.