Medication can be quite expensive, which is why many people opt to buy generic drugs instead of name-brand drugs. Generic drugs often do the exact same thing as name brand drugs but are much more affordable. Unfortunately, a new study by the USC Schaeffer Center for Health Policy & Economics revealed that generic drugs are going up in cost.
The Rise in Cost of Generic Drugs
Even generic heart medications and antibiotics are increasing in price, according to the USC study. More generic drugs are beginning to double in price year-over-year. In 2007, only one percent of generic drugs doubled in price from the previous year. In 2013, 4.39 percent of generic drugs doubled in price.
One of the reasons there has been such a sharp spike is due to a new strategy employed by manufacturers to enter therapeutic areas that have little competition. They then raise their prices significantly.
This has led to outrage amongst the public, especially about medicines that patients need to stay alive. It has led to many questions from critics concerning whether the generic drugs’ market is still effective. Generic drugs not only take up 90 percent of the prescriptions that are filled throughout the country, but they’ve historically been available at lower costs that even decreased over time.
The study revealed that even though the prices for most generic drugs actually declined from 2007 to 2013, the number of generic drugs that doubled in price during that time period grew 400%. It was found that the cause behind these increases mostly had to do more with a lack of competition than a shortage in supply.
Patients’ out-of-pocket costs have not increased as a direct result of increased generic drug costs. However, that could change if insurers respond to continually increasing prices by raising premiums.