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Surprise! Generic-Drug Prices Spike

Less competition and shortages are pushing up drug prices
Surprise! Generic-Drug Prices Spike
Photo illustration by 731; Ring Box: PlainPicture

Bill Drilling, an owner of a pharmacy in Sioux City, Iowa, apologizes as he rings up a customer’s three-month supply of the heart medicine digoxin. The total is $113.12—almost 10 times the cost for the same prescription in August. Digoxin isn’t a new miracle drug. It’s a plant-derived medicine that’s been in use since the 18th century and one of nearly 100 generics that have at least doubled in price over the past year, an unprecedented number, according to pharmacists and industry consultants. “I’ve been doing this since 1985, and the only direction that generics-drug prices have gone is down,” Drilling says.

Off-patent medicines saved patients in the U.S. $193 billion in 2011 and more than $1 trillion since 2002, says the Generic Pharmaceutical Association. Yet their cost containment effect has diminished noticeably this year, according to Express Scripts Holding, the largest processor of prescription drug claims in the U.S. Its index of the most-often-prescribed generic drugs shows the annual rate at which prices have been falling slowed to 14 percent in September, from 30 percent in January.