What's behind the huge price jump for some generic drugs? [from $20 to $1,849]

Los Angeles Times ^ | October 20, 2014 | David Lazarus

[grundle]

They cited the example of the asthma drug albuterol sulfate. The average cost for a bottle of 100 pills was $11 last October, the pair said. The average charge by this April was up to $434.

The antibiotic doxycycline hyclate cost $20 last October for a bottle of 500 tablets, the congressmen observed. By April, the price was $1,849.

Experts say generics are growing more expensive because of reduced competition among manufacturers and shortages of raw materials. However, that might not explain triple-digit price hikes for some drugs.

"Most generics are increasing in price by an average 10% a year," said Bryan Birch, chief executive of Truveris, a New York company that monitors prescription drug costs. "But we've seen some popular drugs increase by more than 650% in the last year."

He cited simvastatin, the generic equivalent of cholesterol drug Zocor, and clomipramine hydrochloride, the generic version of antidepressant Anafranil. Prices for each rose more than 650% from June 2013 to this June, Birch said.

Geoffrey Joyce, a professor of pharmaceutical economics at USC, said he's seen the cost of some generic meds rise as much as 1,000% in recent months. He called these increases "obscene."

"The question is why," Joyce said.

Each of the experts I spoke with cited industry consolidation as a key reason for rising prices. Rather than the half-dozen or so competitors that many economists believe are necessary to lead to lower prices, only two or three manufacturers now make some generic meds.

[gleeaikin]

If 500 capsules were $500 in 1976, and is now $1830 in 2014, then it is below inflation for those years. See Consumer Price Indicator calculator at link:
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=500&year1=1976&year2=2014
The figure that really bothers me is the fact that the “one time death benefit” at Social Security has not been increased from $255 since 1957(?). It should now be above $2,000 and was meant for a no frills funeral or cremation or to help one pay rent or food for a couple of months. Here is something to really call your Congress critters about.

[gleeaikin]

My levothyroxine at Kaiser Permanente costs $15 copay at their pharmacy for 90 days. Same cost for 2 years. Don’t know what they actually pay.

[Chickensoup]

My copay for 90 is forty-five.

But try to purchase it outright! Bucks and Bucks!