Pharma firms raise prices to offset generics


In response to dwindling revenues from patent expirations, drug companies are aggressively raising prices on their branded offerings. According to the IMS Institute for Healthcare Informatics, $20B of the pharmaceutical industry's 2013 sales growth was due to price increases. This perfectly offset the $19.3B in revenue declines.

Since 2007, the CPI has risen 12% while some drug prices have inflated as much as 400%.

Therapies that cost $300K or more are becoming more common in light of the incentives afforded by the Orphan Drug Act.

Generics comprise 86% of all prescriptions filled but American spent $263B for medicines in 2012, up 11% from 2007's $236B.

Unsurprisingly, industry representatives insist that the proper focus should be on outcomes instead of prices. They also cite the ever-rising cost of R&D.

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