2020 Drug Pricing Survey, 25th Annual
![Prescription drug tablets on a black surface](https://s33007.pcdn.co/wp-content/uploads/2018/01/Health-Care-Drug-Prices.jpg)
The majority of respondents expect U.S. brand drug prices will continue to rise over the next 3 years at a mid-single digit rate, similar to the past. An outlier response from a large purchaser predicted declines leading to a weighted average of zero. Clearly, there is some uncertainty. Price controls are unlikely, but rheumatology, oncology, and diabetes drugs may be vulnerable to price erosion.
Cowen and Company conducted its 25th Annual Drug Pricing/Purchasing Trends survey of U.S. buyers to gain insight into the direction of U.S. drug prices over the next 3 years. Our survey results are based on responses from 26 U.S HMOs, PBMs and hospitals. Collectively, they purchased $52B+ of drugs in 2018, or over one-fifth of total U.S. retail drug purchases.
This year’s sample of purchasers anticipate that brand drug acquisition cost per unit will increase by an average of 7% annually over the next 3 years, but projections are flat on a weighted average basis. The average is slightly higher than last year’s 3-year forecast of 3-5% annually, although the weighted average represents a reversal in a decades-long trend. This change is driven primarily by one respondent, a very large purchaser. Thirty-eight percent of respondents attribute a substantial (75%) portion of the anticipated increase over the next 3 years to a mix shift to higher-priced, newer therapies vs. 13% last year. Average generic drug acquisition cost per unit is expected to increase 1%, but on a weighted average basis decline 6%, over the next 3 years.
Respondents indicate that an average of a 30% price discount would be needed to switch from a brand to a biosimilar product. For molecules for which one biosimilar is available, an average of 25% of dispensed prescriptions are likely to be biosimilar substitutions in three years. This rises to an average of 34% when three biosimilars are available, down from the 47% forecast of last year.
Forty-two percent of respondents believe there is a 10% or less chance that price controls on pharmaceuticals will be implemented in the U.S. in the next three years (vs. 50% of respondents last year). Only 12% of these respondents believe there is a 50%+ chance (vs. 23% of respondents last year). When asked how the likelihood of price controls has changed in the last five years, 35% indicate no change, 54% believe the likelihood has increased somewhat, while only 12% feel the likelihood has increased significantly. Thirty-two percent thought the likelihood had increased significantly when asked last year.