U.S. prices for commonly used brand-name drugs have risen at more than six times the rate of inflation, according to a report by Express Scripts, which runs a mail-order pharmacy and manages prescription drug plans for employers.
Express Scripts said that highly used brand-name drugs increased 13.3 percent from September 2011 to September 2012, while the overall rate of inflation was 2 percent.
Generic prices declined 21.9 percent during the same period. Express Scripts said the 35.2 percentage point difference was the largest widening of brand and generic prices since it began calculating its prescription price index in 2008.
Express Scripts became the biggest pharmaceutical benefits manager in April after buying Medco Health Solutions for $29 billion.
Government and private insurers have tried to control soaring health-care costs in part by encouraging patients - and the doctors prescribing medicine - to use cheaper generic drugs, which now fill nearly 80 percent of the market.
Express Scripts, which had a third-quarter profit of $324 million, earns a higher margin on generic drugs.
"What's really remarkable is the gap [between branded drug prices and generics] is getting larger because of the number of generics and the discounts on those generics are steep," Express Scripts chief medical officer Steve Miller said, according to Reuters.
Despite the many Americans with various forms of diabetes and heart disease, the largest category of spending was on drugs for mental and neurological disorders. That category now accounts for 24.7 percent of all traditional drug spending.
Josephine Martin, executive vice president of the Pharmaceutical Research and Manufacturers of America (PhRMA), the branded-drug trade group, said in a statement that Express Scripts was "cherry picking" in some of its calculations, especially regarding newer specialty drugs, and ignoring the underlying nature of the generic-branded situation.
"Cost savings attributable to generic drugs represent one stage of the prescription-drug life cycle," Martin said. "Such savings are possible because innovator biopharmaceutical research companies - the most research-intensive sector in the U.S. economy - produce medical advances through pioneering scientific work and long-term, expensive, risky investments. Without the development of new medicines by innovator companies, there would be neither the new treatments essential to progress against diseases nor generic copies."
Contact David Sell at dsell@ phillynews.com or 215-854-4506. Read his blog at www.philly.com/phillypharma and on Twitter @phillypharma.