Prescription Drug Prices Have Increased Three Times Faster than the Rate of Inflation Over the Last Decade, Even After Discounts

A new JAMA study shows that the net price of prescription drugs has increased more than three times faster than the rate of inflation over the course of a decade, even after manufacturer discounts.

“Previously, we were limited to studying list prices, which do not account for manufacturer discounts. List prices are very important, but they are not the full story,” said lead author Inmaculada Hernandez, Pharm.D., Ph.D., assistant professor of pharmacy at Pitt in a press release. “This is the first time we’ve been able to account for discounts and report trends in net prices for most brand name drugs in the U.S.”

In this retrospective descriptive study, researchers used pricing data from 2007-2018 to assess the US sales of 602 drugs as reported by publicly traded companies. They estimated net prices by collating company reported sales for each drug and the number of US units sold. The primary outcomes included list and net prices and discounts in Medicaid and other payers.

The results showed that from 2007-2018, list prices increased by 159% (95% CI, 137% to 181%), or 9.1% per year, while net prices increased by 60% (95% CI, 36% to 84%), or 4.5% per year, with net prices stabilizing between 2015 and 2018. This occurred even after discounts increased from 40% to 76% in Medicaid and from 23% to 51% for other payers.

Overall, the results showed the following increases in list and net prices:

  • Multiple sclerosis treatments: List prices increased by 439% and net prices increase by 157%.
  • Lipid-lowering agents: List prices increased by 278% and net prices by 95%.
  • Tumor necrosis factor inhibitors: List prices increased by 166% and net prices by 73%.
  • Insulins: List price increased by 262%, and net prices by 51%.
  • Noninsulin antidiabetic agents: List price increased by 165%, and net decreased by 1%.

Moreover, the researchers observed that list price increases were lowest (59%) for antineoplastic agents, but discounts only offset 41% of list price increases, resulting in a 35% increase in net prices.

“We’re seeing a lot of discussion that net prices have stabilized over the last few years, and that does appear to be the case,” said senior author Walid Gellad, M.D., M.P.H., associate professor of medicine and health policy at Pitt and director of the Center for Pharmaceutical Policy and Prescribing.


“But the stabilization of net price comes on top of large increases over the last decade, many times faster than inflation, for products that have not changed over this time period. In addition, this net price is an average, with substantial variability across payers and drugs.”