The Real Story Is Generic Price Increases (Not Really)

  • by: |
  • 02/03/2016
Lots of headlines about the pricing practices of Turing and Valeant, which are the subject of an investigation lead by  Democrats on the House Oversight Committee .  The large retail price increases of these two companies are, we are told by mainstream reporters at Bloomberg, Wall Street Journal, etc media and Congressman Elijah Cummings, is indicative of what is going on in almost every company. 

Well sort of.   As Adam Fein has noted,  most generic drug price increases are a response to shortages, of which we have way too many.  In most cases, the price increases can be blamed on drug shortages. "For example, the NADAC per unit for doxycycline hyclate (100 mg tab) increased from 5.6 cents to $3.65 (+6,351%). The increase is most likely due to a nationwide shortage. I presume there‚Äôs also an active gray market, as in generic injectables. For context, see Drug Shortages and Gray Market Profiteering."

And the retail price, once again, is not the real price.  Again, Adam (drug)channels Mr. Spock in his logical analysis of the gap between retail and acquisition cost.



Adam's columns on pricing are more educational and authoratative than the turgid reports from some members of Congress. 

CMPI

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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