Drug prices expected to rise nearly 12% this year

After years of relatively stable annual price increases, the costs of pharmaceuticals are expected to shoot up nearly 12 percent this year, Kaiser Health News has reported.

One of the biggest drivers is the success of Sovaldi, the drug introduced by Gilead Sciences to treat hepatitis C. A course of treatment for a single patient ranges from $84,000. Gilead's other hepatitis C drug, Harvoni, costs $94,500 for a treatment regimen.

Partly due to these introductions, the overall cost of pharmaceutical delivery in the United States is expected to rise by 11.7 percent in 2014.

"The hepatitis C drugs are exhibit A when you look at escalating drug costs," Brian Henry of Express Scripts, told Kaiser Health News. "You never had a drug that costs that much that can treat so many people."

Other factors, including fewer medications going off patent, are contributing to the cost rise, according to Kaiser Health News. Those factors will send the cost of pharmaceuticals in United States to reach between $375 billion and $385 in 2014, according to the IMS Institute for Healthcare Informatics.

However, the price spike is expected to be relatively short-lived. IMS has projected drug costs will increase between 7 percent and 9 percent in 2015. That's attributable in part to the market adjusting to the hepatitis C drugs, as well as two pricey pharmaceuticals--leukemia drug Gleevac and the antipsychotic medication Abilify--that will go off-patent and likely be supplanted by generic drugs. Various studies have suggested that the use of generic drugs over brand names saves the U.S. healthcare system tens of billions of dollars a year.

"We think the spike in growth will moderate next year, and further moderate in 2016," IMS Heath Executive Director Murray Aitken told Kaiser Health News. Aitken believes drug prices will go up 5 percent or 6 percent the year after next.

To learn more:
- read the Kaiser Health News article