GAO: Retail Drug Price Expenditures Have Nearly Doubled Since 1990s
Posted 19 December 2017 | By
The US Government Accountability Office (GAO) on Tuesday released a new report on the pharmaceutical industry's sales and expenses related to research and development (R&D), noting that the amount of money people spend on prescription drugs has nearly doubled since the 1990s, mostly because of brand-name drugs.
Retail prescription drug expenditures were estimated to account for about 12% of total personal health care service spending in the US in 2015, up from about 7% through the 1990s, according to the 78-page report, which was the result of a request from Rep. Elijah Cummings (D-MD) and Sen. Bernie Sanders (D-VT) in November.
"Much of this growth was driven by use of expensive brand-name drugs, but price increases have been reported for some generic drugs as well," the report says.
GAO also highlights a rise in revenue over the last decade as companies' R&D expenses have slowly inched up while the federal government's tab for early research has actually declined.
From 2006 to 2015, pharmaceutical companies' revenue increased from $534 billion to $775 billion (about 45%), with most of the growth occurring between 2006 and 2011, the report said.
From 2008 to 2014, industry's spend on R&D increased from $82 billion in 2008 to $89 billion in 2014, though federal spending for biomedical research, primarily funded through the National Institutes of Health, decreased 3.8% in real dollars from $27 billion in fiscal year 2008 to $26 billion in fiscal year 2014, according to GAO's analysis of federal survey data.
In terms of trends, research GAO reviewed "indicates that fewer competitors in the drug industry are associated with higher prices, particularly for generic drugs," the report said.
GAO Report: DRUG INDUSTRY: Profits, Research and Development Spending, and Merger and Acquisition Deals