28 January 2019 - A recent study published in Health Affairs concludes that list price inflation for existing brand medicines is a key driver of rising medicine spending. 

However, by failing to account for the substantial rebates and discounts that payers negotiate for many brand medicines, this study dramatically overestimates the role of list price increases.

Analysts at SSR Health recognised this fatal flaw in the study and replicated the methodology using net medicine prices (that is, prices that take these negotiated rebates and discounts into account). By using data that more accurately reflect the cost of medicines, the analysts reached the opposite conclusion of the Health Affairs study, namely that medicine spending increases are not driven by price increases for existing brand medicines. In fact, SSR Health data show that average net prices for single-source brand medicines have been falling since the fourth quarter of 2017, and fell 5.1 percent as of the third quarter of 2018.

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