In the United States, list prices of on-patent medicines are rapidly increasing in some therapeutic areas.

The prices of Disease Modifying therapies (DMT) in the United States for Multiple Sclerosis have sky-rocketed over the past twenty-years. 

First-generation DMTs, originally costing $8,000 to $11,000 (at launch), now cost over $80,000 per year. Newer DMTs have commonly entered the market with a launch-price 25%-60% higher than existing DMTs.

In addition, costs for these agents have increased annually at rates 5 to 7 times higher than prescription drug inflation. Since 1994, not a single MS product has dropped in price. In fact, every time a new drug came onto the market, the price of all drugs increased. The prices for some have climbed in-sync by an average of 30% per year for two decades.  Often referred to as “shadow” or “lockstep” pricing, drug companies don’t compete for customers by undercutting other makers’ prices; rather, when one raises its prices, the others follow suit. And, it's not illegal - the U.S. system allows it. The insulin market is another prime-example. 

Other nations have more been successful at muting the costs. List prices for the same drugs observed in Australia and the U.K. show that launch prices in the U.S. are twice as high for MS products .

One major issue is the lack of generics or biosimilars for leading MS drugs. There are limited generics on the market and a growing number of lawsuits against emerging biosimilars. The other being not all are interchangeable. This means insurers have less flexibility in limiting coverage for certain drugs.

(chart via @OECD)

 

 

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