• Chart of the day: Medicare Part D drug price growth

    The chart, from MedPAC (PDF), is below. It doesn’t report anything particularly new. I just like the presentation. It requires a bit of explanation.

    Measured by individual national drug codes (NDCs), Part D drug prices rose by an average of 23 percent cumulatively between January 2006 and December 2010. At the same time, Part D sponsors have had success at encouraging enrollees to switch from brandname drugs to generic substitutes. As measured by a price index that takes this substitution into account, Part D prices grew cumulatively by 2 percent between January 2006 and December 2010.

    The rules governing Part D plans require them to cover “all or substantially all” drugs in six protected classes. The chart also illustrates price growth for those classes.

    As measured by individual NDCs, prices for drugs in the six protected classes showed a trend similar to that for all Part D drugs, rising by a cumulative 21 percent over the five-year period.

    drug prices


    • http://www.gabionline.net/Reports/Generic-drug-prices-decrease-brand-name-prices-increase

      Note that complex biologicals have a 22% price increase in 2012. Wow. Generics are already more than 75% of all prescriptions. That is at least part of why brand name prices are rising so fast. I predict we will get to 85% generic in 5 years. Probably won’t get higher than that.

    • Is it literally that you just like the shape of the trend lines? This data itself — as compared to everything else in that chapter of the 2013 Medpac Report to Congress — seems pretty trivial.

      Doesn’t the chart simply say brand-name drug prices continue to rise in aggregate but not as fast as in earlier years because some very popular brand-name drugs now have generic substitutes, which drives down the price of those brand-name drugs? And more people are using generic drugs anyways.

      What seems interesting on this topic is why LIS beneficiaries are moving to generics much more slowly than non-LIS beneficiaries. Maybe — but I somehow doubt it — us baby boomers are less likely to be LIS beneficiaries than and healthier than our older brothers and sisters and parents?