Harvard Medical School
Institutional Affiliation: Harvard University
NBER Working Papers and Publications
|July 2019||The Price to Consumers of Generic Pharmaceuticals: Beyond the Headlines|
with Richard G. Frank, Ernst R. Berndt: w26120
Generic drug prices have been the focus of much attention in recent years, with Congressional committees, executive agencies and private organizations all conducting investigations into the pricing patterns for generic drugs. Price spikes for selected old, off-patent drugs have also been widely reported in the media. To place these generic price increases into context, we construct two chained Laspeyres consumer price indexes (CPIs), using the 2007-2016 IBM MarketScan Commercial Claims and Encounters Research Database. The first ("direct out-of-pocket CPI") measures consumers' direct out-of-pocket payments to the dispensing pharmacy, while the second ("total CPI") represents the total revenues received by the dispensing pharmacy – the consumers' direct out-of-pocket payments plus the am...