TY - JOUR
T1 - Trajectories of prices in generic drug markets
T2 - what can we infer from looking at trajectories rather than average prices?
AU - Trujillo, Antonio J.
AU - Gutierrez, Jose C.
AU - Garcia Morales, Emmanuel E.
AU - Socal, Mariana
AU - Ballreich, Jeromie
AU - Anderson, Gerard
N1 - Funding Information:
We thank Caleb Alexander, Juliana Bol, Jodi Segal and Josh Sharfstein for helpful comments. This work was supported by the Laura and Arnold Ventures. The funding sources had no role in the design and conduct of the study, analysis, or interpretation of the data, and preparation or final approval of the manuscript prior to publication.
Publisher Copyright:
© 2022, The Author(s).
PY - 2022/12
Y1 - 2022/12
N2 - Background: Well-functioning competitive markets are key to controlling generic drug prices. This is important since over 90% of all drugs sold in the US are generics. Recently, there have been examples of large price increases in the generic market. Methods: This paper examines price trajectories for generic drugs using a group-based trajectory modelling approach (GBTM). We fit the model using quarterly price information in the IBM MarketScan claims database for the past decade. Results: We identify three dominant price trajectories for this period: rapid increase trajectories, slow decline and rapid decline. Most generic drugs show a slow or a rapid decline in price trajectories. However, around 17% of all generic drugs show rapid price increase trajectories. Conclusions: As Congress is exploring an excise tax on drugs whose list price increases faster than the rate of inflation, we discuss what drugs would be most likely to be affected by this law.
AB - Background: Well-functioning competitive markets are key to controlling generic drug prices. This is important since over 90% of all drugs sold in the US are generics. Recently, there have been examples of large price increases in the generic market. Methods: This paper examines price trajectories for generic drugs using a group-based trajectory modelling approach (GBTM). We fit the model using quarterly price information in the IBM MarketScan claims database for the past decade. Results: We identify three dominant price trajectories for this period: rapid increase trajectories, slow decline and rapid decline. Most generic drugs show a slow or a rapid decline in price trajectories. However, around 17% of all generic drugs show rapid price increase trajectories. Conclusions: As Congress is exploring an excise tax on drugs whose list price increases faster than the rate of inflation, we discuss what drugs would be most likely to be affected by this law.
KW - Drug
KW - Generic drugs
KW - Group based trajectory models
KW - Mergers and acquisitions
KW - Prices
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U2 - 10.1186/s13561-022-00384-w
DO - 10.1186/s13561-022-00384-w
M3 - Article
C2 - 35819735
AN - SCOPUS:85133905451
SN - 2191-1991
VL - 12
JO - Health Economics Review
JF - Health Economics Review
IS - 1
M1 - 37
ER -