WASHINGTON – Today, U.S. Senators Mark Warner (D-Va.), Claire McCaskill (D-Mo.), Bill Nelson (D-Fla.), and Susan Collins (R-Maine) reacted to a Government Accountability Office (GAO) report that studied generic drug prices paid by the Medicare program. 

While the report found an overall drop in generic drug prices, the study showed that 300 of the 1,441 established generic drugs analyzed had at least one extraordinary price increase of 100 percent or more between first quarter 2010 and first quarter 2015. GAO found that competition for a particular drug was the largest indicator in whether or not that drug experienced extraordinary price hikes—with sole source producers being far more likely to hike prices than drugs with multiple manufacturers.

“This investigation confirms that generics can play an important role in keeping costs down for seniors and the Federal government, but dramatic price increases for some drugs, especially some older drugs, substantially undermine this progress,” Warner said. “As Congress continues to discuss new and better ways to pay for value in the pharmaceutical market and our healthcare system as a whole, we need to protect seniors by carefully examining the complex factors contributing to these increases and determine areas where congressional action is necessary.”

“While the overall decline in generic drug costs is positive, we’ve got a sizeable number of people who are dramatically ramping up costs on generic drugs,” McCaskill said. “And I really struggle to understand the reasons a company would more than double the price of an older, generic drug beyond simply trying to bilk American consumers, many of whom are in desperate financial and medical situations.”

“Seniors shouldn’t have to choose between putting food on the table or paying for their prescription drugs,” Nelson said. “While the overall decline in generic drug costs is promising, the massive price increases for some drugs is clearly a problem that needs to be addressed.”

“This GAO study provides a careful and comprehensive analysis of what our government—and our seniors—pay for generic drugs under Medicare. While I am pleased to see a decline in generic drug costs overall, I’m troubled that a significant number of the drugs evaluated experienced such dramatic price increases,” said Collins. “This report helps shed additional light on the problems we face and underscores the importance of competition in the generic drug marketplace to preserving and increasing access to lifesaving drugs.”

The senators had asked GAO to examine generic drug spending and prices for Medicare Part D and look at the factors that affect prices. According to GAO, their report, “describe(d) 1) how generic drug prices under Medicare Part D have changed over time; 2) the extent to which generic drugs under Medicare Part D experienced extraordinary price increases, the persistence of any increases, and their effect on benefit design; and 3) the factors stakeholders identified as contributing to price changes”.

The GAO report can be found online HERE.

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