Falling prices for generic pharmaceuticals

We find the chained direct-out-of-pocket CPI for generic prescription drugs declines by about 50% between 2007 and 2016, while the total CPI [what the dispensing pharmacy receives, the difference being generated by co-pay rates] falls by nearly 80% over the same time period. The smaller decline in the direct out-of-pocket CPI than in the total CPI is due in part to consumers’ increasingly moving away from fixed copayment benefit plans to pure coinsurance or a mixed package of coinsurance and copayments. While consumers are experiencing more cost sharing that in fact shifts more of the drug cost burden on to them, on balance in the US consumers have experienced substantial price declines for generic drugs.

That is from a new NBER working paper by Richard G. Frank, Andrew Hicks, and Ernst R. Berndt.

Comments

I am sorry to report that between 2007 and 2016 the direct-out-of-pocket cost of my prescription drugs hasn't fallen at all.

It's complicated: https://www.brookings.edu/wp-content/uploads/2018/01/es_20180103_bosworthcpiindexes_final.pdf

The Brookings paper does not focus on generics; the one Tyler references does.

Not sure where this is happening, but not in my area. Recently got a scrip for generic Nexium. Checked 3 pharmacies (2 national chains and 1 regional), $427.00 at one and and $275.00 at another. Went to Walmart and found same dosage over the same time: Generic $45.00 and Name Brand Nexium less than $70.00. Rather than doing studies to tell us something we can see with our own eyes, why isn't there a study to determine pricing structure. If I were selling 2 by 4 pieces of lumber at 4 to 8 times the price of everyone else, I would be arrested for price gouging

Generic drugs don't work
https://www.npr.org/sections/health-shots/2019/05/16/723545864/the-generic-drugs-youre-taking-may-not-be-as-safe-or-effective-as-you-think

Is that the spin coming from NPR?

It's not just NPR's view, it's an interview with the author of a book about supposedly less strict standards in the manufacture of generic drugs (especially outside of 1st world countries) which may make them less safe or effective. The same book was linked by Tyler recently.

BJ is exaggerating quite a bit to say that generic drugs simply "don't work," but there is nevertheless valid cause for concern. I take multiple generic drugs and I've been considering switching to brand name.

So, there is resistance. Antigone is when method acting for no reason when out of fashion. Comparing two things for no reason is like comparing everything. Method acting is behaviorism, ask any economist. Jack London invented an imaginary musical device that replaced the brand. Cowen references a brand of pragmatism. Colors help doctors calibrate emotions. And fairies are doctors who chose to be method actors. Diagnosis is a metaphor. It is like the "vase" that stands for a flower that grew from an ocean bed one mile deep. The object of a symbol. If you consider that a mathematician, math, right, works in complete isolation, go ahead compare a particle phycisit for no reason. You will find why William Faulkner measured his inability to experience intrinsic illness. Now, is diagnosis a ends justify the means technique, a factor of a golden conscience, or simply not an "accountable" type of logic, but rather the type people play for, or the profit-maximation technique of reincarnation. The ethos of a miracle, or "miraculousness" is that mathematician's feeling of benevolence or a chance to begin innocence. Going from happy to happiness, a noun (a fact, a premise, or an assumption) to an adverb (a feeling, a safety net, or an insurance plan) is that ethos.

On prescription, the words we choose for ourslef can only ever be important in public. Or fate can supplant focus. Afterall, isn't everyone on this blog under the assumption what we pretend is more important than we do?

Mr. Frogs is proof that residual drugs in the water supply are turning the freaking amphibians crazy. I wonder, what is Cowen's threshold for forum moderation, or at least IP banning? If the cuck guy comes back and calls everyone in every thread multiple variants of "cuck," would he step in?

Tyler has cheerfully accommodated the presence of Cuck Boy for about three years. Do not expect him to suddenly care about the tenor of his comments forum. It's right where he wants it.

I'd rather have the cuck guy than another weak attempt at humor by Thiago.

President Bolsonaro says being cucked by a playboy is the first step towards reviving greatness!

Where is the head censor when you need him?

just try to list a old guitar for sale here!
the censor will show up quick

It almost seems like people respond to incentives.

My personal pharma costs, both generic and non-generic, went up during those years. I understand that anecdotes are not the same as aggregated data but I will trust my own experience more than what the institutions of media or academia tells me.

News reports say Avengers: Endgame has made a couple of billion dollars in ticket sales. I didn't spend any money seeing Avengers: Endgame, so it just doesn't make sense that it could make so much money. "I will trust my own experience more than what the institutions of media or academia tells me."

As a patient and as a doc I found found great savings on generics simply by using the GoodRx cellphone app. Many times the result is cheaper than a typical copay.

Right.

"Hospitals would have to disclose the discounted prices they negotiate with insurance companies under a Trump administration rule that could upend the $1 trillion hospital industry by revealing rates long guarded as trade secrets."

What a joke. Prices are a 'trade secret'? At some point, the public will view the high prices they are forced to pay becomes theft. Some industries absolutely deserve the populism they helped create.

"Industry groups have argued the requirement goes beyond the executive branch’s statutory authority and could backfire by causing prices to rise if hospitals see their competitors are getting higher insurer payments."

Apparently the hospitals disagree with the price mechanism of free markets. They probably feel the 2nd law of thermodynamics doesn't apply to them either.

https://www.wsj.com/articles/trump-proposes-forcing-hospitals-to-disclose-discount-rates-negotiated-with-insurers-11564431303

Trump's power to do this comes from the Obamacare law. The irony is rich.

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