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The Contribution of Price Growth to Pharmaceutical Revenue Growth in the United States: Evidence from Medicines Sold in Retail Pharmacies.
- Source :
- Journal of Health Politics, Policy & Law; Dec2022, Vol. 47 Issue 6, p629-648, 20p, 2 Charts, 3 Graphs
- Publication Year :
- 2022
-
Abstract
- Context: To what extent does pharmaceutical revenue growth depend on new medicines versus increasing prices for existing medicines? Moreover. does using list prices, as is commonly done. instead of prices net of confidential rebates offered by manufacturers. which are harder to observe, change the relative importance of the sources of revenue growth? Methods: This study uses data from SSR Health LLC to address these research questions using decomposition methods that analyze list prices, prices net of rebates, and sales for branded pharmaceutical products sold primarily through retail pharmacies. Findings: From 2009 to 2019, retail pharmaceutical revenue growth was primarily driven by new products rather than by price increases on existing products. Failing to account for confidential rebates creates a more prominent role for price increases in explaining revenue growth, because list price inflation during this period was 10.9%, whereas net price inflation was 3.3%. Conclusions: Policies that restrict price growth on existing medicines likely need to be coupled with policies that reduce launch prices to have a meaningful long-term impact on pharmaceutical revenue growth. Using pharmaceutical list prices is often an inadequate approximation for net prices because the role of rebates has increased and varies by drug class. [ABSTRACT FROM AUTHOR]
- Subjects :
- DRUGS & economics
PHARMACEUTICAL industry & economics
ANTIDEPRESSANTS
ANTI-HIV agents
DRUGSTORES
MEDICAL care costs
ANTI-infective agents
ANTINEOPLASTIC agents
ANTIVIRAL agents
ORPHAN drugs
ECONOMICS
CARDIOVASCULAR agents
INSULIN
DERMATOLOGIC agents
DESCRIPTIVE statistics
RESEARCH funding
PHARMACEUTICAL industry
Subjects
Details
- Language :
- English
- ISSN :
- 03616878
- Volume :
- 47
- Issue :
- 6
- Database :
- Complementary Index
- Journal :
- Journal of Health Politics, Policy & Law
- Publication Type :
- Academic Journal
- Accession number :
- 160388218
- Full Text :
- https://doi.org/10.1215/03616878-10041079