Healthy Skepticism Library item: 9196

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Journal Article

Chukkapalli RM, Kolassa EM, Taylor TH, Ogilvie S.
15-YEAR TREND IN LAUNCH PRICES FOR OUTPATIENT PRESCRIPTION MEDICATIONS
1995 Mar; 42:53

Abstract:

Lately the pricing practices of the pharmaceutical industry have been under fire from various quarters. A study was conducted to examine the introductory prices of prescription drug products for the last 15 years. Data were collected from different secondary data sources including the IMS audits, Drug Topics Red Books, and Drug Facts and Comparisons. A list of outpatient prescription medications from 1979 through 1994 was generated after eliminating generics, OTCs, injectables, etc. The major competitors, their maximum selling dose strength and dosage form, prices for all the drugs and their major competitors, and the daily consumption rate were identified using the secondary data sources listed above. Package sizes, the manufacturer, indication (chronic or acute), patent expiration date, etc. were among the other parameters for which data were collected. Data were analyzed using regression and discriminant analyses techniques. Preliminary results suggest that the trend for the past few years, in competitive markets, has been to price new products at or below that of existing ones. Of the last 18 new products introduced into the outpatient market in the United States, 14 have been priced at or below the price of the market leader. Twenty-seven of the last 39 (about 70%) new agents have been priced at or below the level of major competitors. This study concludes that current pricing of new drugs is predominantly discount, and that there are many different factors to be considered when making a comparison of prices of drugs with their competitors.