Pharmacy's "Usual and Customary" Rx Prices Rise Faster for Branded Drugs

The usual and customary pricescharged by community pharmacies forbrand name prescription drugs are risingsignificantly faster than retailprices for generics, investigators forthe US Government AccountabilityOffice (GAO) said in a report to Congress.

According to that GAO study,"average usual and customary pricesfor 52 frequently used brand drugsincreased about 3 times faster than for47 frequently used generic drugs."The investigators collected data onretail pharmacy pricing practices fromthe records of pharmaceutical assistanceprograms for the elderly in 2states. Their findings indicate thatfrom January 2000 through June 2004the average usual and customaryprices for the branded drugs rose by26.4%—a 5.5% average annual rate ofincrease. In contrast, they told Congress,pharmacy prices for genericdrugs climbed by only 8.3%—a 1.8%average annual rate of increase.

The GAO's researchers found littledifference in the rate of Rx priceincreases for the types of drugs typicallyused by seniors and medicines commonlyused by non-Medicare patients.Average usual and customary prices for77 prescription drugs frequently usedby Medicare enrollees increased by21.8% during the 41/2 -year study period,while pharmacy prices for a groupof 79 drugs used by non-Medicare patientsclimbed by 22.8%.