Trajectories of prices in generic drug markets

Generics/Research | Posted 06/04/2023 post-comment0 Post your comment

In a study by Trujillo AJ et al., the authors adopt a group-based trajectory modelling approach to analyse the price trends of generic drugs. The analysis is conducted using price data collected quarterly over the past decade from the IBM MarketScan claims database. The study focus is to understand the trajectory patterns of these drugs and identify factors that may have influenced their pricing over time [1].

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Trujillo AJ et al. reported that over 90% of all drugs sold in the US are generic drugs. Well-functioning, competitive markets are key to controlling generic drug prices and ensuring access to generic drugs. Recently, there have been examples of large price increases in the generics market, raising questions about the market’s ability to provide access to key drugs at competitive prices. To understand the market behaviour of generic drugs, the study looks at the trajectory of drug prices (how the price evolves from point A to point B) rather than the static point change in drug prices. 

The authors found three dominant price trajectories for this period: rapid increase trajectories, slow decline, and rapid decline. Interestingly, most generic drugs show a slow or a rapid decline in price trajectories; however, around 17% of all generic drugs show rapid price increase trajectories. Characteristics of drugs that experience rapid price increases include drugs taken for chronic conditions, those in highly concentrated markets, and drugs used in acute care.  The approach of identifying which drugs are on a rapid increase trajectory allows for state and federal regulators to monitor price increases of these drugs and to monitor those companies who are in a trajectory of rapid price increases. 

Conflict of interest
The author of the research paper [1] declared that there was no conflict of interest.

Abstracted by Antonio J Trujillo, Associate Professor at Johns Hopkins Bloomberg School of Public Health. Baltimore, Maryland, USA. 

Editor’s comment
Readers interested to learn more about generic drugs pricing are invited to visit to view the following manuscript published in GaBI Journal:

A review of generic medicine pricing in Europe 

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1. Trujillo AJ, Gutierrez JC, Garcia Morales EE, et al. Trajectories of prices in generic drug markets: what can we infer from looking at trajectories rather than average prices? Health Econ Rev. 2022;12(1):37.  

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