USA Today reports on the rise in prescription drug prices, noting “In 2012, prescription drug prices rose 3.6%, twice the 1.7% inflation rate, Bureau of Economic Analysis data show.”
According to the article, brand-name drugs are responsible for driving up costs. “The price escalation on patented drugs has offset enormous savings that have occurred simultaneously from the growing use of inexpensive generic drugs. Generic drugs can be made by multiple companies, which compete on price. Four of every five prescriptions are for generics, which can cost one-fourth or less than the brand name version.”
A report released by the Generic Pharmaceutical Association found that savings due to the use of generic prescription drugs increased $1 billion every other day – totaling $193 billion in 2011 and more than $1 trillion over the past decade. Prescription drugs are expected to account for 10.1% of national health expenditures by 2021.
Health plans recognize that costs are rising at an unsustainable rate, and are working with providers and consumers to help control rising costs through increased utilization of generic drugs. AHIP’s report, Innovations in Recognizing and Rewarding Quality, provides additional details on the ways health plans are increasing the use of generic drugs. These initiatives are helping to control the rise in spending on prescription drugs and keeping health coverage more affordable for consumers.