Net Drug Prices Aren’t Increasing (And It Doesn’t Look Like They Will Anytime Soon)

It’s often a challenge to break through the prevailing narrative that defines much of the mainstream debate on prescription drug pricing: prices are (allegedly) skyrocketing out of control, and strict regulation is needed to “rein in” the reckless increases by “big pharma.”

The actual data, however, stand in stark contrast to this trite and overly simplistic line of messaging.

The facts are this: on average, net prices of brand medicines in the U.S. grew a grand total of 0% last year, according to the latest figures from IQVIA’s The Use of Medicines in the U.S. 2023 . Despite what many would have you believe, net drug prices (the money pharmaceutical manufacturers end up earning after all rebates, discounts, and fees) have grown below the rate of economic inflation five years in a row.

IQVIA projects this phenomenon to continue—and even accelerate—over the next five years. Net drug prices are likely to drop between 2% and 5% yearly “as the structural drivers of low net price growth are expected to remain in effect and be amplified by new legislation and increased competitive intensity.”

Sadly, even as net prices for drugs remain flat, patients aren’t seeing that reflected at the pharmacy counter. A wide array of drug chain middlemen, including PBMs and insurers, have found ways to add needless costs to our health system. The gross-to-net drug pricing bubble reflects how these intermediaries have pushed up prices for patients while taking their own cut. The system they’ve helped create is full of incentives to help them and short of proper incentives to get medicines to more people.

This reality is borne out in IQVIA’s data as well: last year, 53% of patients didn’t fill a new prescription when their out-of-pocket cost exceeded $250. When that OOP was just $10, only 7% of patients abandoned their prescriptions—a stark difference that shows the harmful health effects when middlemen hike up costs for patients and keep savings for themselves. We’ve seen similar patterns in our own research, with high out-of-pocket costs reducing initiation and adherence to medicines, generally , and within specific patient populations, including patients prescribed oral anticancer medicines , who often face high cost-sharing.??

IQVIA’s latest report is yet another piece of ironclad research that adds to the mountain of evidence countering the common narrative of skyrocketing drug prices. Policymakers must follow the science that prioritizes the patient to ensure that negotiated rebates and savings reach those they are intended to benefit.