Presciption and Generic Drug Costs
(7/11/08)- European Union investigators are widening a probe of the practice of "parallel trading" to see if the brand name drug manufacturers in Europe are illegally trying to prevent the practice. Parallel trading involves wholesale or trading companies buying drugs in a country where prices are cheap and then reselling it in a different country where the drug sells for a higher price.
Drug companies oppose parallel trading because it undercuts their direct sales, but wholesalers say it benefits consumers by lowering the price of these drugs. Some of the major drug companies have required their wholesalers to sell direct-to-pharmacy channels wherein the wholesaler is paid a fee to deliver goods to a pharmacy rather then selling to the wholesaler who in turn marks it up when sold to the pharmacy.
(3/2/08)- Pharmaceutical companies increased wholesale prices for the 50 top-selling branded drugs by an average of 7.82% in 2007, after increases of 6.73% and6.22% in the previous two years, according to Delta Marketing Dynamics Inc., a health care marketing research firm.
Please note that the U.S. economy as a whole, had an inflation rate of 4.1% last year.
The Delta Marketing figures represent the wholesale acquisition cost, which is the manufacturers wholesale list price. It does not reflect discounts and/or rebates that are given to large health organizations such as HMOs, hospitals, chain drug stores, PBMs and other health insurers.
Bernstein research estimates that about $67 billion of prescription drug sales will lose their patents by 2012.
According to Anthony A. Barrueta, vice-president of government relations at the Kaiser Foundation Health Plan Inc., branded drugs account for less than 20% of the health insurer's prescriptions, but account for more than 85% of its drug costs.
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By Allan Rubin
updated July 11, 2008
To e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com