An Analysis of Trends of Generic Drugs and Biologic Prices in the U.S.

Author

Mohammed Jamjoom, Chapman UniversityFollow

Date of Award

Spring 5-2023

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Pharmaceutical Sciences

First Advisor

Enrique Seoane-Vazquez, Ph.D. Chair

Second Advisor

Lawrence M. Brown, PharmD, Ph.D., FAPhA

Third Advisor

Terence C. Burnham, Ph.D.

Fourth Advisor

Cyril Rakovski, Ph.D.

Fifth Advisor

Rosa Rodriguez-Monguio, Ph.D., M.S.

Abstract

Introduction: Drug prices are a significant problem for the US healthcare system. Generic and biosimilar market competition reduces drug and biologic prices, results in substantial savings, and improves patient access and outcomes. As the costs of healthcare and prescription drugs continue to rise, the discussion about drug prices has taken a prominent place at the forefront of national discourse. This study assessed impacting trends in prices of generic, biosimilar, and reference products in the US. We also evaluated the effect of the Affordable Care Act (ACA) of 2010 on biologic prices.

Methods: We extracted a list of the new generic drugs approved by the FDA from January 2013 to December 2018 from the FDA website and the acquisition cost from the Centers for Medicare and Medicaid Services (CMS) National Average Drug Acquisition Cost (NADAC) database. We extracted a list of biosimilar products approved by the FDA as of September 2021 from the FDA website and Average Sales Price (ASP) from the 1^st quarter of 2005 to the 3^rd quarter of 2021 from the CMS website database. We segmented the data using inflection point detection and conducted piecewise linear regression to find differences in the trends for the segments defined by the inflection points. We used R Project for Statistical Computing version 3.6.1 for the analysis.

Results:The median generic prices at market entry represented 65.7% of the brand prices and 26.0% three years after generic entry. The median reference drug prices increased by 1.0% per month in the pre-generic period, remained constant in the generic entry period (3 months before to 6 months after generic entry), and increased by 0.4% per month in the post-generic period. Biosimilar prices represented 75% of the reference biologic prices at market entry. The median prices of reference biologics declined after biosimilar competition, while the prices of biologics without competition increased (94.5 vs. 163.6, p

Conclusions: Market competition significantly reduced drug and biologic prices and affected the price trends of reference products. The prices of drug and biologic reference products decreased after biosimilar market entry. Prices of biologics significantly increased after the implementation of the ACA.

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Recommended Citation

Jamjoom, M. An Analysis of Trends of Generic Drugs and Biologic Prices in the U.S.. [dissertation]. Irvine, CA: Chapman University; 2023. https://doi.org/10.36837/chapman.000426