Skyrocketing drug costs became the stuff of congressional hearings and presidential campaign speeches in 2015, and not only because of the brash Martin Shkrelis of the world.
The federal government announced this month that prescription drug spending hit $297.7 billion last year — up more than 12 percent, the largest annual increase in more than a decade. A new generation of specialized drugs and price hikes on existing medications helped to drive that spike, and officials have predicted that annual spending on medications will grow 6.3 percent on average through 2024.
If there’s a bright spot amid the troubling rise in the cost of prescription drugs, perhaps it is this: Many of the most widely used generic drugs actually were cheaper at the end of 2015 than when the year began, according to an analysis released Tuesday by the prescription drug price comparison site GoodRx.
The site, which searches for the lowest prices available to consumers in a local area, found that 30 of the 50 most popular generic drugs have fallen in price since January. The drugs cover nearly every common condition, from allergies to heart conditions to mental disorders.
For example, GoodRx found that atorvastatin, the generic form of the statin drug Lipitor, dropped more than 8 percent over the course of the year, to an average of $13 for a 30-day supply. A 30-day supply of Montelukast, the generic form of the asthma and allergy treatment Singulair, fell nearly 20 percent to $18. The same amount of Fluoxetine, the generic form of Prozac, dropped more than 30 percent to $5.
“The reality is that about 85 percent of drugs taken in this country are generic. … Those are surprisingly inexpensive and getting less expensive, in many cases,” GoodRx co-founder Doug Hirsch said. “For [many] generic drugs, there’s a lot of competition … There are market forces at work to make sure those prices go down.”
Those findings generally are in line with other research, such as a report issued earlier this year by the AARP Public Policy Institute. It found that prices of widely used generic drugs declined overall between 2006 and 2013. And in 2013, generic drugs used by older Americans, including Medicare beneficiaries, fell an average of 4 percent, it said.
But the report warned that while the retail price of some drugs decreased by 30 percent or more, “some generic drug products had equally substantial, or in some cases extraordinary, price increases. Further, the rate of generic price declines has been slowing for the past decade, indicating that the era of consistent generic drug price decreases may be coming to an end.”
In addition, many Americans are paying more in out-of-pocket costs as their insurance deductibles rise or their coverage plans change. One expensive prescription, even for some people who are insured, can amount to thousands of dollars a year.
The truth is, it’s a complicated and byzantine exercise to determine what any person, company or insurer pays for a particular drug. There are list prices, wholesale prices, discounted prices, negotiated prices. There are rebates and formularies, differences in outpatient versus inpatient drugs. The system is opaque more often than not.
So what will 2016 bring?
Hirsch, of GoodRx, predicts patients might see generic versions of widely used drugs such as the statin Crestor, the sleep disorder drug Nuvigil and the targeted cancer therapy Gleevec. But that’s only part of the story. Between changing insurance premiums, greater overall health-care costs, the arrival of new high-priced therapies and the ongoing possibility of price spikes in once-cheap drugs, many patients can count on continuing worries about the impact on their pocketbooks.