The Government Accountability Office (GAO) says prices for more than 400 brand-name drugs jumped dramatically between 2000 and 2008, and it might be due to limited competition.
The GAO looked at 416 brand-name drug products representing 321 drug brands. In eight years, these products had "extraordinary" price increases, according to the GAO.
Price increases ranged mostly between 100 percent and 499 percent, with a median of 158 percent. In some cases, increases were as high as 1,000 percent or more.
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Brand-name drugs with extraordinary price increases shared a few characteristics, including therapeutic class, cost or packaging.
More than half of the increases fell into three therapeutic classes–central nervous system agents, anti-infective agents, and cardiovascular agents. Increases were also seen for brand-name drugs costing less than $25 per unit. And, more than half of all extraordinary price increases were for repackaged drugs–drugs purchased from manufacturers or wholesalers and resold in smaller packages to health care providers such as hospitals or physicians, according to the GAO.
The GAO says price increases could be attributed to a lack of therapeutically equivalent drugs–generics and other brand-name drugs used to treat the same condition–and limited competition.
"The availability of few therapeutically equivalent drugs may result from patent protection and market exclusivity, and the limited size of the market for a given drug," according to a GAO report. "Experts noted that the transfer of drug rights and corporate consolidations may limit competition among drug companies, resulting in few drug options."
Unusual events–such as disruptions in production due to shortages of raw materials–and other factors may also contribute to some extraordinary price increases.
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