In a new report (pdf), the Government Accountability Office looks into what caused hundreds of extraordinary increases in prescription drug prices during the past decade. The GAO defines an “extraordinary” price increase as a single hike that more than doubled a drug’s price, an event that occurred regularly throughout the past decade. In their summary of the report (pdf), the GAO summarizes the relevant numbers thus:
From 2000 to 2008, 416 brand-name drug products—different drug strengths and dosage forms of the same drug brands—had extraordinary price increases. These 416 brand-name drug products represented 321 different drug brands. The number of brand-name drug products that had these extraordinary price increases represents half of 1 percent of all brand-name drug products. The number of extraordinary price increases each year more than doubled from 2000 to 2008 and most of the extraordinary price increases ranged between 100 percent and 499 percent. Almost 90 percent of all brand-name drug products that had an extraordinary price increase sustained the new higher price—by either having another increase in price or remaining at the increased price.
More than half of the these extraordinary increases came in drugs in the central nervous system, anti-infective, and cardiovascular classes. According to the report, limited competition and a lack of equivalent drugs (either from generics or brand-name competitors) may be to blame for the price increases. Industry consolidation is also an issue, analysts said, as several drugs jumped in price after their parent company’s acquisition had been finalized.
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