Why Have Prices for Dermatologic Drugs Skyrocketed?

The prices for dermatologic generic drugs are soaring, and over the last ten years they have increased faster than inflation rates, reimbursement, and national healthcare growth. In a study recently published in JAMA Dermatology, a group of researchers sought to get to the bottom of the momentous price hikes, and found that the number of manufacturers associated with a medication is a likely indicator for a drug’s price increase.

The team of researchers led by Arash Mostaghimi, MD, MPA, MPH, looked at Medicare Part D reports from the National Average Drug Acquisition Cost (NADAC) database between 2013 and 2016 to evaluate the price per unit for 166 topical dermatologic formulations. They found that the most popular topical generic medications among Medicare subscribers were topical steroids (56 percent), acne and rosacea formulas (17.2 percent), and antifungal drugs (16.4 percent).

Their investigation determined that drugs made by one or two manufacturers were 20.6 percent more expensive than medications that were produced by three or four manufacturers. However, drugs with five or six manufacturers were 19.5 percent more expensive and those associated with six or more manufacturers were 33.2 percent more expensive.

“The FDA should continue to advance policies that reduce barriers to market entry for generic manufacturers,” said Dr. Mostaghimi. “Allowing importation of foreign medications for drugs with fewer manufacturers may curtail costs. Policies to automatically substitute the cheapest same class, same-vehicle agent for a given prescription may allow patients to have access to cheaper medications without delays.”