GAO 

United States Government Accountability Office

Report to Congressional Requesters

BRAND-NAME 

PRESCRIPTION 

DRUG PRICING 

Lack of 

Therapeutically 

Equivalent Drugs and 

Limited Competition 

May Contribute to 

Extraordinary Price 

Increases 

December 2009 

GAO-10-201 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

December 2009

BRAND-NAME PRESCRIPTION DRUG PRICING

Lack of Therapeutically Equivalent Drugs and Limited 

Competition May Contribute to Extraordinary Price 

Highlights of GAO-10-201, a report to Increases

congressional requesters 

The growing cost of brand-name 

prescription drugs—FDA-approved 

drug products that typically have 

patent protection—is a concern for 

patients, payers, and providers of 

health care—particularly when 

price increases are large and occur 

suddenly. A 2008 congressional 

hearing by the Joint Economic 

Committee drew attention to some 

small market prescription drugs 

that had an extraordinary price 

increase—a price increase of 100 

percent or more at a single point in 

time. 

GAO was asked to examine 

extraordinary price increases for 

brand-name prescription drugs. 

Specifically, GAO examined the: 

(1) frequency of extraordinary 

price increases for brand-name 

prescription drugs from 2000 to 

2008, (2) characteristics of the 

brand-name prescription drugs that 

had extraordinary price increases, 

and (3) factors that contributed to 

the extraordinary price increases 

experienced by these brand-name 

prescription drugs. To determine 

the frequency and characteristics 

of the brand-name prescription 

drugs that experienced an 

extraordinary price increase, GAO 

reviewed drug pricing and other 

data from a pharmaceutical 

industry compendium. To illustrate 

the factors that may contribute to 

extraordinary price increases, GAO 

developed case studies of six 

brand-name prescription drugs 

identified from the analysis of drug 

pricing data. These brand-name 

prescription drugs were selected 

based on factors including price, 

and the percentage and number of 

price increases. 

From 2000 to 2008, 416 brand-name drug products—different drug strengths 

and dosage forms of the same drug brands—had extraordinary price 

increases. These 416 brand-name drug products represented 321 different 

drug brands. The number of brand-name drug products that had these 

extraordinary price increases represents half of 1 percent of all brand-name 

drug products. The number of extraordinary price increases each year more 

than doubled from 2000 to 2008 and most of the extraordinary price increases 

ranged between 100 percent and 499 percent. Almost 90 percent of all brandname drug products that had an extraordinary price increase sustained the 

new higher price—by either having another increase in price or remaining at 

the increased price. 

More than half of the brand-name drug products that had extraordinary price 

increases were in just three therapeutic classes—central nervous system, antiinfective, and cardiovascular. These therapeutic classes include drugs used to 

treat conditions such as fungal or viral infections, and heart disease. About 

half of the extraordinary price increases were for brand-name drug products 

that were purchased from drug manufacturers or wholesalers, repackaged, 

and resold in smaller packages to health care providers such as hospitals or 

physicians. However, some drug repackagers serve a niche in the drug market, 

and therefore may have a small share of the market in a therapeutic class. The 

majority of all extraordinary price increases were for drugs priced less than 

$25 per unit; however, a full course of treatment for some of these drugs could 

total several thousand dollars. 

Based on interviews with experts and industry representatives, a lack of 

therapeutically equivalent drugs—both generics and other brand-name 

drugs used to treat the same condition—and limited competition may 

contribute to extraordinary price increases. The limited availability of 

therapeutically equivalent drugs may result from patent protection and 

market exclusivity, and the size of the market for a given drug. Patent 

protection and market exclusivity temporarily limit competition and 

thereby allow a drug company to recoup research and development costs 

and earn a return on its financial investment. Two of six case study drugs 

that had extraordinary price increases were patented at the time of the 

extraordinary price increase. The transfer of the rights to a drug and 

corporate consolidations among drug companies may result in fewer drug 

options and contribute to extraordinary price increases, according to 

experts. For example, the rights to four of the case-study drugs were 

obtained by a new drug company, and two of these drugs had an 

extraordinary price increase shortly after the rights to the drugs were 

purchased. Finally, experts and industry representatives noted that 

unusual events—such as disruptions in production due to shortages of raw 

materials—and other factors, including manufacturing issues, may also 

contribute to some extraordinary price increases.

View GAO-10-201 or key components.

For more information, contact John Dicken at 

(202) 512-7114 or DickenJ@gao.gov. 
Page i GAO-10-201 

Contents 

Letter 1

Background 4 

More Than 400 Extraordinary Price Increases Occurred for Over 

300 Drug Brands from 2000 to 2008 9 

Most Brand-name Drug Products with Extraordinary Price 

Increases Were in Three Therapeutic Classes, Cost Less Than 

$25 Per Unit, or Were Repackaged 12 

Lack of Therapeutically Equivalent Drugs and Limited Competition 

May Contribute to Extraordinary Price Increases for Brandname Drugs 16 

Expert Comments 20 

Appendix I Scope and Methodology 22 

Appendix II Brand-name Prescription Drugs with an 

Extraordinary Price Increase, 2000 to 2008 26 

Appendix III Characteristics of Case Study Drugs 31 

Appendix IV GAO Contact and Staff Acknowledgments 33 

Related GAO Products 34 

Tables 

Table 1: Annual Frequency of Extraordinary Price Increases for 

Brand-name Drugs, 2000 to 2008 10 

Table 2: Annual Frequency of Extraordinary Price Increases for 

Brand-name Drug Products by Percentage Increase in 

Price, 2000 to 2008 11 

Table 3: Therapeutic Classes of Brand-name Drug Products That 

Had Extraordinary Price Increases, 2000 to 2008 13 

Table 4: Frequency of Extraordinary Price Increase by Price Level, 

by Brand-name Drug Products, 2000 to 2008 14 

Prescription Drug Pricing 
Table 5: Annual Frequency of Extraordinary Price Increases for 

Repackaged and Nonrepackaged Brand-name Drug 

Products, 2000 to 2008 15 

Table 6: Repackaged Brand-name Drug Products that Had an 

Extraordinary Price Increase, 2000 to 2008 27 

Table 7: Nonrepackaged Brand-name Drug Products that Had an 

Extraordinary Price Increase, 2000 to 2008 29 

Table 8: Summary of Characteristics of the Six Case Study Drugs 31 

Abbreviations 

AWP average wholesale price 

DOJ Department of Justice 

FDA Food and Drug Administration 

FTC Federal Trade Commission 

NDC national drug code 

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Page ii GAO-10-201 Prescription Drug Pricing
Page 1 GAO-10-201 

United States Government Accountability Office

Washington, DC 20548 

 

December 22, 2009 

The Honorable Charles E. Schumer 

Vice Chairman 

Joint Economic Committee 

United States Congress 

The Honorable Amy Klobuchar 

United States Senate 

The growing cost of brand-name prescription drugs can be a burden on 

patients, payers, and providers of health care—particularly when price 

increases are large and occur suddenly. Controlling rising prescription 

drug prices helps to ensure that patients can afford medically necessary 

and sometimes life-saving medications, and to moderate costs for 

hospitals and third-party payers such as insurance plans and state and 

federal governments. However, a hearing held in July 2008 by the Joint 

Economic Committee drew attention to certain prescription drugs that 

recently had an extraordinary price increase—a price increase equal to 

100 percent or more at a single point in time. 

Drug manufacturers may consider several factors when setting prices for 

brand-name prescription drugs, including a drug’s patent status and 

market exclusivity. Patents and market exclusivity may provide a limited 

period of protection from competition, thereby allowing a drug company 

to recoup research and development costs and earn a return on its 

financial investment. Drug manufacturers may obtain patents or patent 

extensions from the U.S. Patent and Trademark Office. In addition, 

independent of a drug product’s patent status, the Federal Food, Drug, and 

Cosmetic Act authorizes various periods of market exclusivity for drug 

products. 

In this report, GAO studied extraordinary price increases for brand-name 

prescription drugs. Specifically, we examined (1) the frequency of 

extraordinary price increases for brand-name prescription drugs from 

2000 to 2008, (2) the characteristics of the brand-name prescription drugs 

that had extraordinary price increases, and (3) the factors that contributed 

to the extraordinary price increases experienced by these brand-name 

prescription drugs. 

Prescription Drug Pricing 
 

To determine the frequency of extraordinary price increases, we reviewed 

the average wholesale price (AWP)1

 for all brand-name prescription drugs 

in Thomson Reuters’ Red Book,2

 and identified all extraordinary price 

increases—a unit price3

 increase of 100 percent or more at a single point 

in time—from 2000 to 2008. Red Book includes drug prices for each 

package size (for example, 30, 60, or 100 tablets) and dosage form (for 

example, tablet or injection) of a brand-name drug.4

 We report the 

frequency of extraordinary price increases in two ways—by drug brand 

(or drug label name as recorded in Red Book) and by brand-name drug 

product. For the drug brand frequencies, we counted an extraordinary 

price increase if the price of any version of a brand-name drug increase

by 100 percent or more at a single point in time. For brand-name drug 

products, we counted each extraordinary price increase for each 

version—drug strength and dosage form—of the brand-name drug 

separately. For example, if both the 1mg and 5mg tablet versions of a drug

had extraordinary price increases, we categorized this as one drug brand

increase, and as two brand-name drug product increases (one for each 

version of the brand-name drug). The frequencies of extraordinary price 

increases reported include brand-name drug products that were 

repackaged for resale to health care providers such as hospitals or 

d 

physicians.5

 To identify the characteristics of brand- 

 

1

In this report, drug prices are measured by the AWP, a drug pricing benchmark that is 

commonly used in the pharmaceutical industry. AWP is in most cases the manufacturer’s 

suggested list price and does not necessarily reflect the actual price charged by a 

wholesaler. 

2

Red Book is a drug pricing compendium with information about prices and other 

characteristics of drug products, published by Thomson Reuters. 

3

A unit price is the (1) price per gram; (2) price per milliliter; or (3) price for each piece, 

such as for products sold in tablets. The unit price and other characteristics of the brandname drugs cited in this report were those recorded in the Red Book as of December 31, 

2008. 

4

The name of a drug and its manufacturer, the strength of the drug, and the package size or 

number of units (such as tablets) in the package are represented by a 11-digit national drug 

code (NDC-11). 

5

Prescription drugs may be repackaged from bulk drug purchases into smaller packages 

and identified by the repackaging company’s unique NDC. Repackaged drugs are typically 

sold to health care providers, who then resell them to patients. 

Page 2 GAO-10-201 Prescription Drug Pricing
 

name drug products that had an extraordinary price increase, we used Red 

Book data on therapeutic class6

 and price. 

To identify the factors that may contribute to extraordinary price 

increases, we interviewed drug policy experts; academic researchers; state 

and federal government officials; consumer advocates; insurance company 

representatives; and representatives from hospital, health insurance, and 

retail pharmacy associations. To illustrate the factors that may contribute 

to extraordinary price increases, we developed case studies of six 

different brand-name drugs from different drug companies identified from 

our analysis of Red Book data. Each brand-name drug that was active in 

the market as of December 31, 2008 and that had an extraordinary price 

increase was eligible for selection for the case study. To achieve variability 

in the characteristics of the brand-name drugs reviewed for the case study, 

our selection was based on several factors, including a drug’s price, the 

level of the percentage increase, whether the drug had more than one 

extraordinary price increase between 2000 and 2008, availability of the 

drug from multiple sources, and permanence of the price increase. To gain 

an understanding of the market and other dynamics leading to the 

extraordinary price increase experienced by each brand-name drug in our 

case studies, we interviewed representatives of the companies that 

manufacture and distribute these brand-name drugs,7

 and obtained 

information about each drug company’s business strategy from the 

companies’ Web sites, annual and quarterly reports, and other resources. 

(See app. I for a detailed description of our scope and methodology.) 

We reviewed the Red Book data file to assess its reliability. This review 

involved an assessment of the variables in Red Book to identify incorrect 

and erroneous entries or extreme outliers. We compared a random sample 

of the pricing data reported in Red Book with pricing data in another drug 

pricing compendium. Based on this review, we determined that the data 

used in this report were adequate for our purposes. 

 

6

Drugs that possess a similar chemical structure and similar therapeutic effects are 

grouped into therapeutic classes. Most drugs within a therapeutic class produce similar 

benefits, side effects, adverse reactions, and interactions with other drugs and substances. 

7

For this report, companies that manufacture and/or sell brand-name drugs are referred to 

as drug companies. 

Page 3 GAO-10-201 Prescription Drug Pricing
 

We conducted our work from October 2008 through December 2009 in 

accordance with all sections of GAO’s Quality Assurance Framework that 

are relevant to our objectives. The framework requires that we plan and 

perform our engagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

believe that the information and data obtained, and the analysis 

conducted, provide a reasonable basis for any findings and conclusions in 

this product. 

Extraordinary price increases for brand-name drugs can lead to 

substantially higher drug spending for public and private insurance plans, 

hospitals, and other providers that cover prescription drugs. Patients may 

also face higher out-of-pocket costs and reduced access to medically 

necessary and sometimes life-saving drugs. In addition, extraordinary 

price increases for brand-name drugs may contribute to overall drug 

spending, which has increased an average of about 10 percent a year since 

2000.8

 As reported during the Joint Economic Committee hearing, a small 

but growing subset of drugs have had very large and sudden price 

increases since 2000, raising questions about the competitiveness of the 

prescription drug marketplace. 

Background 

Overview of Brand-name 

Drugs 

Brand-name drugs are drug products that have received FDA approval and 

typically have patent protection.9

 After the patent and any applicable 

period of market exclusivity expires, these drugs are still considered 

brand-name drugs, but other drug companies may develop a generic 

equivalent—a similar drug that contains the same active ingredient, 

 

8

While prescription drug spending and prices continue to rise, the rate of growth in 

spending and prices for prescription drugs declined in 2007. In 2000, national spending for 

retail prescription drugs was $120.6 billion, compared to $227.5 billion in 2007—an average 

increase of 10 percent a year. In 2007, retail prescription drug spending grew 4.9 percent, 

and prescription drug prices increased 1.4 percent. M. Hartman, A. Martin, P. McDonnell, A. 

Catlin, and the National Health Expenditure Accounts Team, “National Health Spending in 

2007: Slower Drug Spending Contributes to Lowest Rate of Overall Growth Since 1998,” 

Health Affairs, vol. 28, no. 1 (2009). However, there is preliminary indication of higher drug 

price increases from 2008 to 2009. 

9

To obtain FDA approval for a drug, a drug company must conduct clinical studies showing 

that the drug is safe and effective for its intended use, or indication. 

Page 4 GAO-10-201 Prescription Drug Pricing
 

strength, dosage form, route of administration, and intended use.10 The 

FDA reviews and approves both brand-name and generic prescription 

drugs. 

Brand-name drugs may be supplied to health care providers from 

companies other than a drug’s manufacturer. For example, brand-name 

drugs may be repackaged from large drug inventories into smaller 

packages, and sold by a repackaging company using a unique national 

drug code (NDC). Repackagers include health maintenance organizations, 

pharmacies, and private companies. Repackagers are required to follow 

FDA guidelines, such as registering annually with the FDA and labeling 

drugs under the same brand name. Repackagers may obtain prescription 

drugs from wholesalers, and sell the repackaged drugs to health care 

providers such as hospitals or physicians who then dispense them to 

patients. Proponents of repackaged drugs believe that they offer 

convenience to patients and may reduce medication errors.11 However, 

some experts suggest that repackaging drugs may unnecessarily increase 

drug prices and profits. Repackagers may assign AWPs for repackaged 

drugs that differ from the AWP suggested by the drug’s manufacturer. 

Patents, Market 

Exclusivity, and Orphan 

Drugs 

Patents and market exclusivity protect prescription drugs by limiting 

competition for a set period of time. A drug manufacturer may seek a 

20-year patent on various aspects of its new chemical entity from the U.S. 

Patent and Trademark Office.12 Once a patent is granted, other drug 

manufacturers are excluded from making, using, or selling the patented 

formula during the life of the patent. Companies that develop new brandname drugs generally obtain a patent on the active ingredient used in the 

drug. Patents may be granted for other properties of a brand-name drug, 

 

10While a brand-name drug is patented, therapeutically similar brand-name drugs not 

containing the same active chemical ingredient, also known as “me-too” drugs, may be 

developed and marketed by a drug company. Also, the FDA may not approve generic 

therapeutic equivalents to a brand-name drug prior to the expiration of the drug’s patent 

unless the applicant certifies that the patent is invalid or that the generic drug does not 

infringe the patent. 

11Drugs obtained directly from health care providers may eliminate travel to a pharmacy to 

obtain a prescribed drug. In addition, the availability of repackaged drugs from the health 

care provider may reduce medication errors caused by poor handwriting—such as 

administering the wrong medication or an incorrect dosing. 

12See 35 U.S.C. §§ 111, 154. 

Page 5 GAO-10-201 Prescription Drug Pricing
 

such as its formulation and composition, and/or method of use.13 After 

receiving a patent on a brand-name drug, drug companies typically seek 

approval from the FDA for use of the drug to treat certain indications. 

Market exclusivity may be granted for approved drugs and is independent 

of the rights granted by a patent. The Federal Food, Drug, and Cosmetics 

Act authorizes various periods of market exclusivity for drug products. 

Generally, market exclusivities prevent the FDA from approving any 

application for a competing drug compound for a stated period of time. 

These exclusivities may relate to new chemical entities (5 years),14

previously approved drugs with a new application that is based on new 

clinical studies (3 years),15 generic drugs (180 days),16 drugs tested for use 

in children (6 months),17 and orphan drugs (7 years).18 Market exclusivity 

and patent protection may run concurrently. 

The Joint Economic Committee hearing in July 2008 identified certain 

brand-name drugs which treat rare diseases that experienced 

extraordinary price increases. Incentives are available for drug companies 

to develop innovative drugs for rare diseases (orphan drugs). In addition 

to the 7-year market exclusivity status, these incentives may include tax 

incentives of up to 50 percent of the cost of clinical research, and a waiver 

of FDA fees.19 Research grants are also available through the FDA for the 

development of drugs used to treat rare diseases or conditions. 

 

13Patents may be granted for several properties of a drug. For example, a drug company 

may obtain a patent on the active ingredient used in the drug. Companies may also obtain 

patents on the use of a drug, and a drug’s formula and composition. Although a patent may 

be granted for a drug product long before its approval for marketing by the FDA, a 

company may obtain a patent term extension in certain circumstances. 

1421 U.S.C. § 355(c)(3)(D)(ii). 

1521 U.S.C. § 355(c)(3)(D)(iii). 

1621 U.S.C. § 355(j)(2)(D)(iv). Exclusivity pertains to the first applicant of an abbreviated 

new drug application based on a previously approved brand-name drug. 

1721 U.S.C. § 355a. 

1821 U.S.C. § 360cc. An orphan drug is a drug that treats a rare disease or condition which is 

generally defined as affecting fewer than 200,000 people in the United States. 

19The FDA is responsible for designating drugs as orphan drugs. 

Page 6 GAO-10-201 Prescription Drug Pricing
 

Drug Market Trends According to experts, the drug industry’s traditional business model is 

changing. In the past, large drug companies conducted research and 

development on several drugs, with the goal of releasing one or more 

“blockbuster” drugs that treat a large population and can earn billions of 

dollars. Recently, drug companies have increasingly focused on specialty 

drugs that target niche markets, or a smaller population of people with a 

narrow indication or medical condition. According to experts and industry 

representatives, the pace of consolidation among drug companies through 

mergers and acquisitions and transfers of drug ownership rights has 

increased. Fewer companies producing and marketing drugs can lead to 

greater market domination among certain companies and less 

competition. In addition, large drug companies have purchased other drug 

companies that specialize in manufacturing drugs targeting niche 

populations or drugs in similar therapeutic classes. 

Setting Prescription Drug 

Prices 

According to some economists, the usual mechanisms that enforce market 

discipline may not work in the same manner in the health care market. In 

most markets—automobiles, for example—consumers are expected to be 

conscious of the price of goods. If a company raises the price of its goods, 

consumers would likely purchase fewer goods, causing the company’s 

revenues to decline. However, health care providers influence demand 

because they typically act on behalf of patients, who may remain unaware 

of drug costs. If the patient is insured and their medical bills are paid by a 

third-party payer, then demand may not be significantly influenced by 

changes in price to the extent that it might be in other markets. Some price 

restraint may be provided by pharmacy benefit managers and health plans 

that use drug formularies to negotiate price rebates on brand name 

prescription drugs. 

According to industry representatives and experts, drug companies may 

consider several issues when setting the price of a drug. These include: 

(1) the perceived value of a drug relative to its competitors, such as its 

ease of use; (2) the unique characteristics of a drug, such as its novelty, the 

frequency of administration, and safety; (3) the cost of therapeutically 

alternative drugs and alternative therapies, such as surgery, medical 

devices, and existing drugs; (4) the disease treated; (5) the size and 

characteristics of the patient market; (6) research and development, 

manufacturing, and marketing costs; (7) the willingness of customers to 

pay for the drug; and (8) the amount of reimbursement for the drug from 

Page 7 GAO-10-201 Prescription Drug Pricing
 

third-party payers. To mitigate high drug prices some companies subsidize 

the price of some of their brand-name drugs through a patient assistance 

program to low-income uninsured or underinsured patients.20

Federal Oversight While prescription drug pricing in the private sector is not subject to 

federal regulation, drug companies are subject to antitrust enforcement. 

The Federal Trade Commission (FTC) and the U.S. Department of Justice 

(DOJ) enforce federal antitrust laws that prohibit activities such as 

mergers and acquisitions that may substantially reduce competition or 

create a monopoly.21 Companies are required to notify the FTC and DOJ of 

certain pending mergers, also known as the pre-merger notification 

program.22 In addition, the FTC has authority to investigate and take action 

against unfair methods of competition affecting commerce, including in 

the drug industry.23 Price fixing agreements between businesses, certain 

monopolies, and other anticompetitive conduct are subject to review and 

enforcement action. FTC officials indicated that the FTC has not brought a 

case against a drug company for charging extraordinarily high prices 

because such activity is not expressly prohibited by federal law, and 

because high drug prices in the absence of anticompetitive behavior are 

not per se illegal. The FTC has challenged anticompetitive patent 

settlements between brand-name and generic drug manufacturers. For 

example, FTC officials indicated that the agency has filed cases 

challenging “pay-to-delay” settlements in which a brand-name 

manufacturer shares a portion of its future profits with a potential generic 

competitor in exchange for an agreement to delay marketing the generic 

prescription drug. 

 

20Underinsured patients typically face limited covered benefits and high out-of-pocket costs 

such as deductibles, coinsurance, or copayments. 

21See 15 U.S.C. §§ 18, 1. In addition, states investigate and litigate potential violations of 

state as well as federal antitrust law. See 15 U.S.C. § 15c. 

2215 U.S.C. § 18a. Companies involved in transactions that do not meet certain criteria are 

not required to notify the FTC and DOJ. The FTC and DOJ may seek an injunction to halt 

the acquisition or require that companies divest certain drugs if they determine that the 

merger is likely to be anticompetitive. 

23See 15 U.S.C. § 45 (prohibiting unfair methods of competition). 

Page 8 GAO-10-201 Prescription Drug Pricing
 

Finally, drugs must be manufactured in accordance with FDA regulations 

called good manufacturing practices, and the FDA inspects manufacturing 

facilities before a drug can be approved.24 Good manufacturing practices 

are designed to ensure the safety and quality of drug products and lay out 

minimum standards for the facilities and equipment used in manufacturing 

drug products. All drug manufacturers—including companies that acquire 

the rights to a drug from another manufacturer—are required to comply 

with good manufacturing practices. 

Between 2000 and 2008, 416 brand-name drug products representing 

321 drug brands had extraordinary price increases. Most often, these 

extraordinary price increases ranged from 100 percent to 499 percent, but 

in a few cases were 1,000 percent or more. 

More Than 400 

Extraordinary Price 

Increases Occurred 

for Over 300 Drug 

Brands from 2000 to 

2008 

From 2000 to 2008, 416 

Extraordinary Price 

Increases Occurred for 321 

Different Drug Brands 

From 2000 to 2008, 416 brand-name drug products representing 321 drug 

brands had an extraordinary price increase. A number of these 321 drug 

brands had two or more extraordinary price increases between 2000 

and 2008. The number of brand-name drug products that had these 

extraordinary price increases each year trended upwards, more than 

doubling from 2000 to 2008; however, they represent about half of 

1 percent of all brand-name drug products. (See table 1 for the frequency 

of extraordinary price increases.) Most brand-name drug products that 

had an extraordinary price increase sustained the new price after the 

extraordinary price increase occurred.25 For example, following the 

extraordinary price increase, about 87 percent of the brand-name drug 

 

24See 21 C.F.R. part 211 (2009). 

25About 90 percent of the extraordinary price increases—380 brand-name drug products—

remained at the increased price for more than 90 days after experiencing the price 

increase, and more than four-fifths remained at the increased price for 180 days or more. 

Page 9 GAO-10-201 Prescription Drug Pricing
 

products remained at the increased price, or had another increase in price, 

and only 13 percent had a decrease in price.26

Table 1: Annual Frequency of Extraordinary Price Increases for Brand-name Drugs, 2000 to 2008 

Category 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Drug brandsa 

Number of extraordinary price 

increases for drug brands 24 21 23 38 38 33 38 52 54 321

Brand-name drug productsb

Number of extraordinary price 

increases for brand-name drug 

products 28 27 31 48 51 39 47 74 71 416

Total number of all brand-name drug 

products on the marketc

11,503 11,503 11,106 11,413 11,436 11,979 12,798 12,895 13,193 N/Ad

Source: GAO analysis of average wholesale price from Red Book. 

Note: Drug prices are identified and reported by a unique national drug code (NDC). 

a

A drug brand is the drug label name as recorded in Red Book. 

b

A brand-name drug product includes the same drug brand with different strengths and dosage forms. 

The frequencies for brand-name drug products are reported using NDC-9s. 

c

Total number of brand-name drugs recorded in the Red Book for each calendar year. As of 

December 31, 2008, some of these drugs were no longer active on the market. 

d

Totals for the period are not provided. Drugs that were recorded in Red Book may appear in multiple 

years. 

A number of these brand-name drug products had more than one 

extraordinary price increase. For example, 21 of the 416 brand-name drug 

products had more than one extraordinary price increase between 2000 

and 2008, and 9 of those 21 brand-name drug products had more than one 

extraordinary price increase in the same year. The 416 brand-name drug 

products were sold by 91 drug companies, and 12 of these 91 drug 

companies sold brand-name drug products that had more than one 

extraordinary price increase between 2000 and 2008. Furthermore, 4 of 

these 91 drug companies sold brand-name drug products that had more 

than one extraordinary price increase within the same year. (See app. II 

for a list of brand-name drugs that had an extraordinary price increase.) 

 

26We compared the price of the drug immediately after the extraordinary price increase to 

the last recorded price of the drug as of December 31, 2008. For 361 drugs that had 

extraordinary price increases, the final price recorded for these drugs was the same price 

or higher than the price immediately after the extraordinary price increase. 

Page 10 GAO-10-201 Prescription Drug Pricing
 

Most extraordinary price increases—for 357 of the 416 brand-name drug 

products with extraordinary price increases—ranged from 100 percent to 

499 percent.27 Overall, the median increase for brand name drug products 

was about 158 percent. However, some brand-name drug products had 

very large extraordinary price increases. For example, 26 brand-name drug 

products had extraordinary price increases greater than 1,000 percent—a 

tenfold increase. The largest extraordinary price increase for brand-name 

drug products was about 4,200 percent. (See table 2 for the frequency of 

extraordinary price increases by percent increase.) In addition, 7 brandname drug products had extraordinary price increases of 500 percent or 

more multiple times from 2000 to 2008. 

While Most Extraordinary 

Price Increases Were Less 

Than 500 Percent, Some 

Increases Were 1,000 

Percent or More 

Table 2: Annual Frequency of Extraordinary Price Increases for Brand-name Drug Products by Percentage Increase in Price, 

2000 to 2008 

Category 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Brand-name drug productsa

Total brand-name drug products with 

extraordinary increase in price 28 27 31 48 51 39 47 74 71 416

100-499 percent 22 15 23 43 43 37 43 64 67 357

500-999 percent 3 3 6 5 6 2 2 3 3 33

1,000-1,499 percent 0 4 0 0 2 0 1 2 1 10

1,500-1,999 percent 1 3 0 0 0 0 0 3 0 7

More than 2,000 percent 2 2 2 0 0 0 1 2 0 9

Source: GAO analysis of average wholesale price from Red Book. 

Note: Drug prices are identified and reported by a unique NDC. 

a

A brand-name drug product includes the same drug brand with different strengths and dosage forms. 

The frequencies for brand-name drug products are reported using NDC-9s. 

 

27The NDC-9 code represents the name of the drug and its manufacturer, and strength of 

the drug. The price increases for brand-name drug products that had an extraordinary price 

increase were reported using unit price data recorded at the NDC-9 level. 

Page 11 GAO-10-201 Prescription Drug Pricing
 

Brand-name drug products that had extraordinary price increases shared 

similar characteristics including therapeutic class, cost, or packaging. 

While extraordinary price increases occurred in 20 therapeutic classes, 

more than half of the increases fell into 3 therapeutic classes—central 

nervous system agents, anti-infective agents, and cardiovascular agents. 

Most extraordinary price increases were for brand-name drug products 

costing less than $25 per unit. Depending on the condition treated and 

length of treatment, the full cost of treatment for a drug could total several 

thousand dollars. More than half of all extraordinary price increases were 

for repackaged brand-name drug products. 

Most Brand-name 

Drug Products with 

Extraordinary Price 

Increases Were in 

Three Therapeutic 

Classes, Cost Less 

Than $25 Per Unit, or 

Were Repackaged 

Three Therapeutic Classes 

Accounted for More Than 

Half of the Extraordinary 

Price Increases 

While extraordinary price increases for brand-name drug products 

occurred in 20 therapeutic classes, the majority of the drugs— 

52 percent—that had extraordinary price increases fell into 3 therapeutic 

classes—central nervous system, anti-infective, and cardiovascular 

drugs.28

d antidepressants, and are typically used to treat depression 

r anxiety. 

ive drugs are used to treat infections caused by fungi, 

acteria, or viruses. 

ascular drugs such as anti-arrhythmia agents are 

sed to treat the heart. 

ble 3 for frequency 

of extraordinary price increases by therapeutic class.) 

 

• Central nervous system—126 brand-name drug products had 

extraordinary price increases. Central nervous system drugs include 

sedatives an

o

• Anti-infective—55 brand-name drug products had extraordinary price 

increases. Anti-infect

b

• Cardiovascular drugs—35 brand-name drug products had extraordinary 

price increases. Cardiov

u

The remaining 17 therapeutic classes comprised 192 brand-name drug 

products that had extraordinary price increases. (See ta

28These three therapeutic classes represented 40 percent of all brand-name drugs recorded 

in Red Book. 

Page 12 GAO-10-201 Prescription Drug Pricing
 

Table 3: Therapeutic Classes of Brand-name Drug Products That Had Extraordinary Price Increases, 2000 to 2008 

Therapeutic class 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Brand-name drug productsa

Central nervous system agents 9 6 6 16 12 13 20 24 20 126

Anti-infective agents 9 2 9 8 8 6 6 2 5 55

Cardiovascular agents 3 2 1 0 4 4 5 5 11 35

Other therapeutic classes 7 15 15 23 27 16 16 42 31 192

Total brand-name drug products that 

increased in priceb

28 27 31 48 51 39 47 74 71 416

Source: GAO analysis of average wholesale price from Red Book. 

Note: Drug prices are identified and reported by a unique NDC. 

a

A brand-name drug product includes the same drug brand with different strengths and dosage forms. 

The frequencies for brand-name drug products are reported using NDC-9s. 

b

Columns do not add up to total because eight records were not classified into a therapeutic class in 

Red Book. 

Brand-name Drug 

Products Priced Less Than 

$25 Per Unit Accounted for 

Most of the Extraordinary 

Price Increases 

Ninety-six percent of brand-name drug products that had extraordinary 

price increases cost less than $25 per unit prior to the price increase.29,30

Overall, brand-name drug products that had an extraordinary price 

increase ranged in price from $0.01 per unit to $5,400 per unit prior to the 

price increase. The median price of the brand-name drug products that 

had an extraordinary price increase rose from $1.66 per unit before the 

increase to $4.70 per unit after the increase.31 (See table 4 for the 

frequency of extraordinary price increases by price level.) 

 

29The unit price for brand-name drug products that had an extraordinary price increase 

were reported using unit price data at the NDC-9 level. We report the unit price of a drug 

prior to the extraordinary price increase. A unit price is denoted by Thompson Reuters in 

Red Book as (1) price per gram; (2) price per milliliter; and (3) price for each piece, such as 

products sold by the item, such as tablets or capsules. 

30Of the brand-name drug products priced less than $25 per unit prior to the extraordinary 

price increase, 40 percent were priced less than a dollar, 54 percent between $1 and $9.99, 

and 6 percent between $10 and $24.99. After the extraordinary price increase, 18 percent of 

these drugs were priced less than a dollar, 63 percent between $1 and $9.99, and 19 percent 

between $10 and $24.99. 

31The median price after the increase is calculated using the price recorded in Red Book as 

of December 31, 2008, because the price of these drugs may have increased or decreased 

following the extraordinary price increase. 

Page 13 GAO-10-201 Prescription Drug Pricing
 

Table 4: Frequency of Extraordinary Price Increase by Price Level, by Brand-name Drug Products, 2000 to 2008 

Price prior to increase 

100-499 

percent

500-999 

percent

1,000-1,499 

percent

1,500-1,999 

percent 

2,000 percent 

or more Total

Brand-name drug productsa

Less than $25.00 per unit 344 31 8 7 9 399

$25.00 to $49.99 per unit 4 0 1 0 0 5

$50.00 or more per unit 9 2 1 0 0 12

Total number of brand-name 

drug products that increased 

in price 357 33 10 7 9 416

Source: GAO analysis of average wholesale price from Red Book. 

Note: Drug prices are identified and reported by a unique NDC. 

a

A brand-name drug product includes the same drug brand with different strengths and dosage forms. 

The frequencies for brand-name drug products are reported using NDC-9s. 

It is important to note that the unit price of a drug is only one factor in 

determining the cost of a full course of treatment for a medical condition. 

Other factors affecting cost include the total number of units prescribed 

and the duration of the treatment. For example, the full cost of treatment 

for a drug that is priced less than $25 per unit could total several thousand 

dollars or more. One of the drugs we reviewed that is used to treat a rare 

cancer cost $390 for a full course of treatment prior to the extraordinary 

price increase.32 After two extraordinary price increases, the full cost of a 

course of treatment rose to more than $3,000. 

Repackaged Drugs 

Accounted for More Than 

Half of the Extraordinary 

Price Increases for Brandname Drug Products 

More than half of the brand-name drug products that had extraordinary 

price increases were repackaged—that is, purchased from drug 

manufacturers or wholesalers and resold in smaller packages to health 

care providers such as hospitals or physicians.33 (See table 5 for frequency 

of extraordinary price increases for repackaged and nonrepackaged 

drugs.) Almost all the extraordinary price increases for repackaged drugs 

appear to have originated from the company that repackaged the drug 

 

32The calculation of treatment cost is based on two courses of treatment lasting up to 

28 days. In some cases, patients on this drug may receive only one course of treatment. The 

out-of-pocket cost for a patient varies depending on insurance coverage. 

33The price increases for drugs that had an extraordinary price increase are reported using 

unit price data recorded at the NDC-9 level. Less than half of all brand-name drug products 

recorded in Red Book were repackaged drugs. 

Page 14 GAO-10-201 Prescription Drug Pricing
 

rather than from the company that manufactured the drug.34 Specifically, 

95 percent of repackaged drugs had an extraordinary price increase 

without a corresponding extraordinary price increase by the drug’s 

manufacturer for the identical nonrepackaged drug. However, some drug 

repackagers serve a niche in the drug market and therefore may have a 

small share of the market in a therapeutic class. 

Table 5: Annual Frequency of Extraordinary Price Increases for Repackaged and Nonrepackaged Brand-name Drug Products, 

2000 to 2008 

Category 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Brand-name drug productsa

Repackaged drugs that increased in price 18 10 15 27 19 29 33 31 29 211

Nonrepackaged drugs that increased in price 10 17 16 21 32 10 14 43 42 205

Total brand-name drugs that increased in price 28 27 31 48 51 39 47 74 71 416

Total number of all repackaged brand-name 

drug products on the marketb

3,162 3,496 3,307 3,648 3,743 4,333 5,078 5,423 5,690 N/Ac

Source: GAO analysis of average wholesale price from Red Book. 

Note: Drug prices are identified and reported by a unique NDC. 

a

A brand-name drug product includes the same drug brand with different strengths and dosage 

forms. The frequencies for brand-name drug products are reported using NDC-9s. 

b

Total number of brand-name drugs recorded in Red Book for each calendar year. As of 

December 31, 2008, some of these drugs were no longer active on the market. 

c

Totals for the period are not provided. Drugs that were recorded in Red Book may appear in multiple 

years. 

Almost one-fifth of the 91 companies that sold brand-name drug products 

that had extraordinary price increases were repackagers. The four 

companies with the greatest number of brand-name drug products that 

had an extraordinary price increase were repackagers—ranging from 26 to 

51 brand-name drug products per repackaging company.35 About 99 

 

34To determine whether an extraordinary price increase was initiated by a drug’s 

manufacturer or by the repackager of the drug, we matched all repackaged drugs that had 

an extraordinary price increase to the nonrepackaged equivalent drug brand sold by the 

manufacturer. To account for increases initiated by manufacturers of nonrepackaged drugs 

that had an increase of less than 100 percent and therefore were not captured from Red 

Book, we counted only repackaged drugs that had an increase of at least 200 percent for 

this analysis. 

35These four repackaging companies accounted for about three quarters of all repackaged 

drugs that had an extraordinary price increase. 

Page 15 GAO-10-201 Prescription Drug Pricing
 

percent of repackaged drugs cost less than $25 per unit.36 The median 

price of repackaged drugs that had extraordinary price increases rose 

from $2.14 per unit to $5.39 per unit after the increase.37

Based on interviews with experts and industry representatives, we found 

that a lack of therapeutically equivalent drugs—generics and other brandname drugs used to treat the same condition—and limited competition 

may contribute to extraordinary price increases. According to these 

experts and industry representatives, the availability of few therapeutically 

equivalent drugs may result from patent protection and market exclusivity, 

and the limited size of the market for a given drug. Experts noted that the 

transfer of drug rights and corporate consolidations may limit competition 

among drug companies, resulting in few drug options. The experts and 

industry representatives also noted that unusual events—such as 

disruptions in production due to shortages of raw materials—and other 

factors may also contribute to some extraordinary price increases. 

Lack of 

Therapeutically 

Equivalent Drugs and 

Limited Competition 

May Contribute to 

Extraordinary Price 

Increases for Brandname Drugs 

Limited Availability of Therapeutic Equivalents: Experts we interviewed 

said that drugs without therapeutic equivalents—in some cases due to 

patents or a limited market size—may be more likely to have an 

extraordinary price increase.38 Experts and industry representatives also 

reported that competition within a therapeutic class of drugs may be 

limited by (1) patents for a new drug, such as patents for the active 

ingredient; (2) patents for existing drugs that have been modified by, for 

example, changing a drug’s active ingredient, strength, or delivery 

mechanism;39 and (3) market exclusivity protections. Patents and market 

exclusivity may limit the entry of other prescription drugs into the market. 

An expert also noted that no single factor leads to extraordinary price 

 

36As discussed earlier, the price of a course of treatment depends on the nature of the 

condition treated, how long the condition should be treated, and the number of units of a 

drug used to treat the condition. 

37The median price after the increase is calculated using the price recorded in Red Book as 

of December 31, 2008, because the price of these drugs may have increased or decreased 

following the extraordinary price increase. 

38For this report, we use the term therapeutically equivalent drugs to include both generic 

versions of a brand-name drug and other brand-name drugs used to treat the same 

condition. Generally, according to the FDA a therapeutically equivalent drug refers only to 

the generic version of a brand-name drug. 

39Drug companies may also receive a patent for minor alterations to the formulation of a 

drug such as reversing only the structure of the chemical used in the active ingredient. 

Page 16 GAO-10-201 Prescription Drug Pricing
 

increases, rather a combination of several factors likely contributes to 

these extraordinary price increases. 

Two of our six case study drugs40 had patent protection at the time of the 

extraordinary price increase. (See app. III for a summary of the 

characteristics of the case study drugs.) One drug had a method-of-use 

patent and was the only FDA-approved drug available to treat an acute 

illness affecting infants and young children. The other drug was under 

patent at the time of its extraordinary price increase, and was sold by a 

licensed repackager that purchased the drug from wholesalers. 

In addition, experts and industry representatives we interviewed reported 

that small market drugs, such as orphan drugs or drugs for rare diseases, 

may lack therapeutically equivalent drugs, and thus may be prone to 

extraordinary price increases. When the target patient population or 

market for a drug is relatively small, there may be little financial incentive 

for potential competitors to enter the market and offer competing drugs. 

Two of the drugs we examined in our case studies treat rare diseases. 

These drugs did not have generic equivalents at the time of their 

extraordinary price increases; however, the drug companies reported the 

availability of other drugs that treat similar conditions. Both drugs had 

more than one extraordinary price increase—one of the drugs had two 

price increases that were each more than 1,000 percent, and the other had 

extraordinary price increases in 2 consecutive years. 

Representatives of the manufacturer for one of these drugs reported that 

their company’s business model is based almost solely on sales from the 

drug that had the extraordinary price increases. This drug is currently 

approved for several dozen indications, and the company is funding 

research on other uses for the drug. The second company reported that its 

business model is structured around facilitating the development of drug 

products for rare diseases. The company provides financial support to 

researchers developing new drugs for rare diseases and obtains the rights 

to the drugs created by these researchers. The company considered their 

financial support for developing other rare disease drugs when 

determining the price of their drug. Furthermore, a representative of this 

company stated that it had obtained other drugs that were discontinued by 

a prior owner and then reintroduced the drugs onto the market. Both of 

these drug companies market specialized drugs that treat rare diseases. 

 

40See Apps. I and III for more details on the case study drugs. 

Page 17 GAO-10-201 Prescription Drug Pricing
 

Transfer of Drug Rights, Corporate Consolidations, Mergers, and 

Acquisitions: Experts and industry representatives we interviewed 

reported that transfers of drug ownership rights and consolidations among 

drug companies have increased.41 These transfers and consolidations may 

limit competition as companies that may offer competing prescription 

drugs in a therapeutic class merge or sell their rights to a drug, potentially 

leading to extraordinary price increases for drugs. Fewer drug companies 

competing in a therapeutic class may lead to fewer prescription drugs 

being developed and sold within that class. Industry representatives and 

experts reported that larger drug companies are acquiring drugs from 

smaller drug companies that conduct drug research. Notwithstanding 

potential FTC or DOJ review, drug companies may still acquire 

competitors that offer similar drugs, potentially leading to market 

domination in a therapeutic class.42 The rights to four of our case study 

drugs were obtained by a new drug company, and two of these drugs had 

an extraordinary price increase shortly after the rights to the drugs were 

purchased. 

Unusual Events: Extraordinary price increases were also attributed by 

industry representatives and experts to the occurrence of unusual events, 

such as disruptions in the production of a drug due to shortages of 

necessary raw materials or the added costs to renovate outdated drug 

production plants. For example, a drug in our case study was purchased 

from a drug company that was suspending production of the drug. The 

company that purchased this drug reported investing millions of dollars 

transferring and upgrading the manufacturing equipment, processes, and 

testing methods required to make the drug. The drug’s manufacturer 

attributed the first of two extraordinary price increases to compensating 

for the drug’s production expenses and other costs. Prior to the company’s 

purchase of the drug, it was sold only in limited quantities through a 

patient advocacy group.43 Another drug from our case study was 

purchased by a company that spent several years trying to identify a 

technical partner capable of processing the drug’s active ingredient, which 

was difficult to manufacture because of its cytotoxic nature and the 

 

41A drug’s patent(s) may be acquired through grant, sale, or other type of transfer. 

42Two companies in our case studies have acquired another drug company and its drug 

products. Also, some of the companies in our case studies have acquired the rights to drugs 

manufactured by other companies. 

43According to the company, the previous owner sold the rights to the drug because of 

difficulty manufacturing the drug and its financial losses from low sales of the drug. 

Page 18 GAO-10-201 Prescription Drug Pricing
 

limited quantity of drugs produced. The company’s representative stated 

that due to the unique challenges of producing the active ingredient of the 

drug, two companies were involved in manufacturing and packaging the 

drug. As a result of changes made in manufacturing the drug, the company 

reported investing several million dollars upgrading its manufacturing 

equipment and processes in order to meet updated FDA regulations.44 This 

company considered its investment to produce a stable supply of the drug 

when pricing the product. 

Other Factors: Representatives of the drug companies we reviewed for our 

case studies reported that they considered other factors when determining 

the price of their drugs. For example, one expert noted that extraordinary 

price increases may occur because a drug manufacturer updates the price 

of a drug after obtaining new information about certain demand and 

supply factors affecting the drug. Three of the drug companies reported 

that their products were difficult to manufacture. These companies 

employ third-party manufacturers that produce the drugs. One of these 

companies said that its drug was very toxic, and since its manufacturing 

equipment was used to make other drug products, the equipment must be 

decontaminated after each batch is produced. These drug companies 

factored in these additional costs when they raised the price of their 

products. 

Some of the drug companies we reviewed revised the price of their brandname drugs to bring them in line with the prices of what they regarded as 

similar drugs. One company reviewed the estimated annual cost of several 

orphan drugs when determining the price for its drug, which treats a rare 

disease. Three companies reviewed various drug products and priced their 

drugs in line with these drugs. This pricing strategy led, in part, to these 

drugs experiencing an extraordinary price increase. An official from one of 

these companies reported that the drug was underpriced, and the 

company increased the price of the drug based on the prices of competing 

drug products used for similar medical conditions. Some of the drug 

companies considered the financial solvency of their drug product and 

company, and their fiduciary responsibility to their shareholders when 

determining the price of their drug. 

 

44These changes included upgrades to manufacturing equipment used to detect and reduce 

impurities and revalidation of the entire manufacturing process. 

Page 19 GAO-10-201 Prescription Drug Pricing
 

In some cases, representatives of drug companies cited the quantity of free 

or low-cost drugs donated through their patient assistance program and 

the level of rebates paid to the Medicaid program as factors that they 

considered when raising the price of their brand-name drugs.45 Two drug 

companies said that the level of rebates paid to the Medicaid program was 

a factor for their drugs’ extraordinary price increases.46 The companies 

reported that they charged a higher retail price for their drugs, in part, to 

account for the large financial outlays to patient assistance and 

government programs. One company said that Medicaid beneficiaries 

represent a large portion of the patient population that uses their drug 

product. This company’s representatives stated that over half of its drug 

sales were targeted to their patient assistance program for low-income, 

underinsured, or uninsured individuals or were reimbursed under 

Medicaid and therefore subject to rebates. These companies reported that 

they offered patient assistance programs that provide a large volume of 

free prescription drugs to patients who meet established criteria. The 

programs also provide financial assistance to insured patients who face 

financial hardship from paying copayments or coinsurance. 

We provided a draft of this report to drug policy experts, who provided 

technical comments that we incorporated as appropriate. Expert Comments 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to other 

interested parties. We will also provide copies to others upon request. In 

addition, the report is available at no charge on the GAO Web site at 

http://www.gao.gov. 

 

45Drug manufacturers that wish to have their drugs available for Medicaid enrollees are 

required to enter into rebate agreements with the federal government on behalf of states. 

These rebate agreements are intended to ensure that Medicaid pays the lowest price that 

the manufacturer offers for the drug. Rebates are computed and paid by the drug 

manufacturer each quarter based on drug utilization data supplied by Medicaid. 

46The basic Medicaid rebate is 15.1 percent of a drug’s average manufacturer price (AMP) 

per unit, or the difference between AMP and a drug’s best price, whichever is greater. If a 

brand-name drug’s AMP rises faster than inflation, as measured by the consumer price 

index, an additional unit rebate may be calculated. See U.S.C. § 1396r-8(c). The two 

companies indicated that due to the application of additional unit rebates caused by 

increases in their drug prices, their Medicaid rebates actually exceeded their drugs’ AMPs. 

Page 20 GAO-10-201 Prescription Drug Pricing
 

If you or your staff have any questions about this report, please contact me 

at (202) 512-7114 or at dickenj@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs can be found on the last page 

of this report. GAO staff members who made major contributions to this 

John E. Dicken 

report are listed in appendix IV. 

Director, Health Care 

Page 21 GAO-10-201 Prescription Drug Pricing
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

In this report we address the following objectives: (1) the frequency of 

extraordinary price increases for brand-name prescription1

 drugs from 

2000 to 2008, (2) the characteristics of the brand-name drugs that had 

extraordinary price increases, and (3) the factors that contributed to the 

extraordinary price increases experienced by these brand-name drugs. 

To determine the frequency of extraordinary price increases, we reviewed 

the average wholesale price (AWP)2

 for all brand-name drugs in Thomson 

Reuters’ Red Book,3

 and identified all extraordinary price increases—a 

unit price increase4

 equal to 100 percent or more at a single point in time 

from 2000 to 2008. We calculated the percent change in unit AWP recorded 

in the Red Book for each 11-digit national drug code (NDC-11).5

 For 

example, where a NDC-11 had three unit prices reported in Red Book from 

2000 to 2008 (unit price at point 1, unit price at point 2, and unit price at 

point 3), two data records were created. One record contained the percent 

change in unit price from point 1 to point 2, and the other record 

contained the percent change from point 2 to point 3. We identified 

extraordinary price increases by selecting only records (NDC-11s) with a 

percent change of 100 percent or more. 

Drugs sold in different package sizes—for example, 30, 60, or 100 tablets—

have different NDC-11 codes. Each NDC-11 record captures the label name 

of the drug which includes the dosage form of the drug. Because a brandname drug may have several NDC-11 codes for different package sizes, we 

 

1

Unless otherwise noted, in this report “brand-name drugs” refers to brand-name 

prescription drugs. 

2

In this report, drug prices are measured by AWP. AWP is in most cases the manufacturer’s 

suggested price and does not necessarily reflect the actual price charged by a wholesaler. 

AWP is a drug pricing benchmark that is commonly used in the pharmaceutical industry. 

3

Red Book is a proprietary database containing drug pricing and other drug-related 

information published by Thomson Reuters. Drug manufacturers and companies report the 

price of their drug—in AWP or other pricing benchmarks—to Thomson Reuters for 

publication in the Red Book. In some cases, Red Book calculates AWP values using other 

pricing benchmarks. 

4

A unit price is the (1) price per gram; (2) price per milliliter; or (3) price for each piece, 

such as for products sold in tablets. The unit price and other characteristics of the brandname drugs cited in this report were those recorded in Red Book as of December 31, 2008. 

5

Drug prices are identified and reported in Red Book by an 11-digit number called the NDC11 code. The NDC-11 code represents the name of the drug and its manufacturer, the 

strength of the drug, and the package size—or number of units (such as tablets) in the 

package. 

Page 22 GAO-10-201 Prescription Drug Pricing 
Appendix I: Scope and Methodology 

identified the number of brand-name drug products that had an 

extraordinary price increase by their NDC-9 code, which represents the 

manufacturer and drug name, and strength. Where more than one package 

size of the same brand-name drug had an extraordinary price increase, we 

selected the package size with the highest extraordinary price increase.6

We counted an NDC-9 with different package sizes that had an 

extraordinary price increase on the same date only once. In this report, we 

use three terms to refer to the brand-name prescription drugs recorded in 

the Red Book. Drug brand refers to the label name of a brand-name 

prescription drug; brand-name drug product refers to the different 

products of the same drug brand. Otherwise we use the term brand-name 

drug or drug when we do not need to distinguish between drug brand and 

brand-name drug product. We report the frequency of brand-name drugs 

that had extraordinary price increases by (1) drug brand (drug label name 

as recorded in Red Book), and (2) brand-name drug product (NDC-9 

code). The frequencies of extraordinary price increases reported by brandname drug products (NDC-9) include the same drug brand sold in different 

strengths and dosage forms (e.g., a 1mg or a 5mg tablet). The frequency of 

extraordinary price increases reported includes brand-name drug products 

that were repackaged by a distributor for resale to health care providers.7,8

(See app. II for a list of the brand-name drugs that had extraordinary price 

increases.) To identify the characteristics of brand-name drugs that had an 

extraordinary price increase, we used Red Book data on therapeutic class 

and price. 

 

6

As a result, for these brand-name drugs we do not capture this variation in extraordinary 

price increase by package size. 

7

Prescription drugs may be repackaged from bulk drug purchases into individual dose 

packages and identified by the repackaging company’s unique NDC. Repackaged drugs may 

be sold to health care providers, who then dispense them to their patients. 

8

To determine whether an extraordinary price increase was initiated by a drug’s 

manufacturer or by the repackager of the drug, we matched all repackaged drugs that had 

an extraordinary price increase to the nonrepackaged equivalent drug brand sold by the 

manufacturer. Whenever a match between the repackaged and nonrepackaged drug was 

not found, we concluded that the repackaged drug had an extraordinary price increase 

without a corresponding increase by the drug’s manufacturer for the identical 

nonrepackaged drug. To account for increases initiated by manufacturers of 

nonrepackaged drugs that had an increase of less than 100 percent and therefore were not 

captured from Red Book, we counted only repackaged drugs that had an increase of at 

least 200 percent for this analysis. 

Page 23 GAO-10-201 Prescription Drug Pricing
Appendix I: Scope and Methodology 

To identify the factors that may contribute to extraordinary price 

increases we interviewed drug policy experts; academic researchers; state 

and federal government officials; consumer advocates; insurance company 

representatives; and hospital, health insurance, and retail pharmacy 

associations representatives. To illustrate the factors that may contribute 

to extraordinary price increases, we developed case studies of six drugs 

from different companies identified from our analysis of Red Book data. 

Each brand-name drug (NDC-11) was eligible for inclusion as a case study 

if it was active in the market as of December 31, 2008, and had an 

extraordinary price increase. To achieve variability in the characteristics 

of the drugs reviewed for the case study, selection was based on several 

factors, such as the (1) unit price, (2) percentage increase in price, (3) year 

of increase, (4) number of increases, (5) availability from multiple sources, 

(6) orphan drug status, and (7) permanence of the price increase. 

We also interviewed representatives of the companies that manufactured 

and distributed the case study drugs about the market dynamics leading 

to the drugs’ extraordinary price increases. We gathered information on: 

(1) the characteristics of each drug, such as its patent and market 

exclusivity status, indication, volume, and utilization; (2) corporate 

business and marketing strategy for each drug; (3) factors that influenced 

the extraordinary price increase; and (4) agreements with the makers of 

drugs in the same therapeutic class. Some information provided by the 

representatives during these interviews is considered proprietary. As a 

result, the names of the participating companies and brand-name drugs are 

not identified. (See app. III for information on each of the drugs from the 

case studies.) Information was also obtained from drug companies’ Web 

sites, annual and quarterly reports, and other resources. 

We systematically reviewed Red Book to assess its reliability. The review 

involved an assessment of the frequencies of all numeric and date 

variables in Red Book to identify incorrect and erroneous entries or 

extreme outliers.9

 We compared a sample of the pricing data for brandname drugs that had extraordinary price increases reported in Red Book 

with pricing data contained in another drug pricing compendium and 

found a high degree of concurrence between the prices recorded in both 

 

9

We deleted records from our data files in a few cases where a drug company provided 

evidence showing that an extraordinary price increase had not occurred. In one case, data 

entry errors recording an incorrect package size was the reason for an extraordinary price 

increase. We also deleted one record that showed an extraordinary price increase after 

December 31, 2008. 

Page 24 GAO-10-201 Prescription Drug Pricing
Appendix I: Scope and Methodology 

data sources. Based on this review, we determined that the data used in 

our report were adequate for our purposes. We conducted our work from 

October 2008 through December 2009 in accordance with all sections of 

GAO’s Quality Assurance Framework that are relevant to our objectives. 

The framework requires that we plan and perform our engagement to 

obtain sufficient and appropriate evidence to meet our stated objectives 

and to discuss any limitations in our work. We believe that the information 

and data obtained, and the analysis conducted, provide a reasonable basis 

for any findings and conclusions in this product. 

Page 25 GAO-10-201 Prescription Drug Pricing
Appendix II: Brand-name Prescription Drugs 

with an Extraordinary Price Increase, 2000 to Appendix II: Brand-name Prescription Drugs 2008 

with an Extraordinary Price Increase, 2000 to 

2008 

Using Thomson Reuters’ Red Book,1 we calculated the change in average 

wholesale price (AWP) and identified all unit price increases equal to 100 

percent or more at a single point in time from 2000 to 2008. (See app. I for 

more information.) Based on this analysis, we identified the label names of 

drugs that had extraordinary price increases by their NDC-9 code.2

 AWP 

records in Red Book are reported by the drug manufacturer and published 

in Red Book. In some cases, when drug manufacturers do not report AWP, 

Red Book calculates AWP from other drug pricing benchmarks provided 

by drug manufacturers. GAO did not audit the drug pricing information 

reported to Red Book by drug manufacturers nor the calculations 

performed by Red Book to fill nonreported AWP data. Some of the drugs 

on this list were repackaged, or nonrepackaged, while other drugs were 

both repackaged and nonrepackaged. In a few cases, drugs were removed 

from the list because changes in the recorded package size led to errors in 

the calculated change in unit prices. See table 6 below for the label names 

of brand-name prescription drugs that had an extraordinary price increase 

between 2000 and 2008. 

 

1

Red Book is a database containing drug pricing and other drug-related information 

published by Thomson Reuters. 

2

The NDC-9 code represents the name of the drug and its manufacturer, and strength of the 

drug. 

Page 26 GAO-10-201 Prescription Drug Pricing 
Appendix II: Brand-name Prescription Drugs 

with an Extraordinary Price Increase, 2000 to 

2008 

Table 6: Repackaged Brand-name Drug Products that Had an Extraordinary Price Increase, 2000 to 2008 

Repackaged brand name drugs (Pricing for these drugs is typically set by the repackager 

and not the drug’s manufacturer) 

Name and strength of drug Name and strength of drug Name and strength of drug 

Abilify Tab 5MG Floxin Tab 300MG Provera Tab 2.5MG 

Actos Tab 15MG Floxin Tab 400MG Prozac Cap 20MG 

Actos Tab 30MG Fulvicin P/G Tab 330MG Restoril Cap 30MG 

Adderall Tab 5MG Glyset Tab 25MG Risperdal Tab 1MG 

Ambien Tab 5MG Ionamin Cap 15MG Risperdal Tab 0.5MG 

Ambien Tab 10MG Ismo Tab 20MG Risperdal Tab 0.25MG 

Amoxil Cap 250MG Lamictal Tab 25MG Robinul Inj 0.2MG/ML 

Amoxil Cap 500MG Lamictal Tab 200MG Septra DS Tab 

Anaprox Tab 275MG Lanoxin Tab 0.25MG Seroquel Tab 25MG 

Anaprox-DS Tab 550MG Levaquin Tab 250MG Seroquel Tab 100MG 

Ansaid Tab 100MG Levaquin Tab 500MG Seroquel Tab 50MG 

Antabuse Tab 250MG Levaquin Leva-pak 750MG Silvadene Cre 1% 

Aricept Tab 10MG Levoxyl Tab 0.088MG Singulair Tab 10MG 

Arthrotec Tab 75MG-0.2MG Lidoderm Patch 5% Skelaxin Tab 400MG 

Avandia Tab 4MG Lipitor Tab 80MG Skelaxin Tab 800MG 

Axert Tab 12.5MG Locoid Cre 0.1% Soma Compound w/Code Tab 

Bayhep B Inj Lomotil Tab 0.025MG-2.5MG Sumycin Cap 250MG 

Bextra Tab 20MG Lotensin Tab 40MG Synalgos-DC Cap 

Biaxin Sus 250MG/5ML Lunesta Tab 1MG Synthroid Tab 0.1MG 

Bontril Cap ER 105MG Lunesta Tab 2MG Synthroid Tab 0.088MG 

Bontril Slow Cap 105MG Lunesta Tab 3MG Terazol 3 Vag Cre 0.8% 

Brevital Sodium Inj 500MG Lyrica Cap 100MG Tigan Inj 100MG/ML 

Bromfed Tab Lyrica Cap 200MG Tobradex Opth Sus 

Cataflam Tab 50MG Lyrica Cap 50MG Tobrex Opth Sol 0.3% 

Ceftin Tab 125MG Lyrica Cap 75MG Topamax Tab 25MG 

Ceftin Tab 250MG Marcaine Inj 0.5% Topamax Tab 100MG 

Ceftin Tab 500MG Maxitrol Opth Sus Toprol XL Tab 50MG 

Celebrex Cap 200MG Mephyton Tab 5MG Transderm Scop Patch 

Celebrex Cap 100MG Methergine Tab 0.2MG Ultram Tab 50MG 

Cerumenex Otic Sol 10% Mevacor Tab 20MG Ultram ER Tab ER 200MG 

Cipro Tab 500MG Miacalcin Spr 200iu/Act Valium Tab 5MG 

Cipro Tab 750MG Miralax Pwd for Soln Valtrex Tab 1GM 

Claritin Tab 10MG Mobic Tab 15MG Vicodin Tab 

Codiclear DH Syr Mobic Tab 7.5MG Vicoprofen Tab 

Page 27 GAO-10-201 Prescription Drug Pricing
Appendix II: Brand-name Prescription Drugs 

with an Extraordinary Price Increase, 2000 to 

2008 

Repackaged brand name drugs (Pricing for these drugs is typically set by the repackager 

and not the drug’s manufacturer) 

Name and strength of drug Name and strength of drug Name and strength of drug 

Combivir Tab Motrin Tab 800MG Vioxx Tab 25MG 

Compazine Sup 25MG Niferex-150 Forte Cap Viracept Tab 250MG 

Compazine Tab 10MG Nitrolingu Spr 0.4/Spray Viramune Tab 200MG 

Coumadin Tab 2.5MG Nitrostat SL Tab 0.4MG Vivelle-Dot 0.1MG/24hrs 

Cutivate Cre 0.05% Norco Tab Voltaren Tab 75MG 

Cytotec Tab 200mcg Norflex Tab 100MG Zebeta Tab 5mg 

Dalmane Cap 30MG Norvasc Tab 10MG Ziagen Tab 300MG 

Daypro Tab 600MG Norvir Cap 100MG Zithromax Tab 250MG 

Depo-Estradio Inj 5MG/ML Ovral Tab Zithromax Z-Pak Tab 250MG 

Desowen CRE 0.05% Paxil CR Tab 25MG Zocor Tab 10MG 

Diovan Tab 160MG Paxil CR Tab 12.5MG Zocor Tab 20MG 

Dovonex Cre 0.005% Paxil CR Tab 37.5MG Zocor Tab 40MG 

Dovonex Oin 0.005% Pediazole Sus Zoloft Tab 25MG 

Duricef Cap 500MG Pepcid Tab 40MG Zyprexa Tab 10MG 

E.E.S.-400 Film Tab 400MG Peridex Liq 0.12% Zyprexa Tab 2.5MG 

Econopred Plus OP Sus 1% Phenergan Tab 25MG Zyprexa Tab 7.5MG 

Effexor Tab 100MG Phenergan Sup 12.5MG Zyprexa Tab 5MG 

Effexor XR Cap ER 75MG Phenergan Sup 50MG 

Effexor-XR Cap 75MG Phenhist Expectorant Liq 

Effexor-XR Cap 37.5MG Phoslo Tab 667MG 

Eryc Cap 250MG Plendil Tab 5MG 

Estrace Tab 1MG Plendil Tab 10MG 

Flexeril Tab 5MG Ponstel Cap 250MG 

Flovent Inh 0.22/Act Premarin Tab 0.625MG 

Floxin Tab 200MG Prilosec Cap 20MG 

Source: GAO analysis of Red Book data. 

Note: Following the extraordinary price increase, some drugs may have become discontinued or 

transferred from one manufacturer to another. In some cases, an extraordinary price increase for a 

drug may not be attributed to the manufacturer that currently owns the drug. 

Page 28 GAO-10-201 Prescription Drug Pricing
Appendix II: Brand-name Prescription Drugs 

with an Extraordinary Price Increase, 2000 to 

2008 

Table 7: Nonrepackaged Brand-name Drug Products that Had an Extraordinary Price Increase, 2000 to 2008 

Nonrepackaged brand name drugs 

Name and strength of drug Name and strength of drug Name and strength of drug 

Adderall Tab 5MG Hectorol Cap 2.5MCG Omnipaque 300 Inj 64.7% 

Ala-Scalp HP Lot 2% Hectorol Liq Cap 2.5MCG Oncoscint CR/OV Inj 1MG 

Amytal Sodium Inj 0.5GM Hep-Lock Inj 10U/ML Optison IV Susp 

Ancobon Cap 250MG Histatrol Inj 0.275/ML Oracit Sol 

Ancobon Cap 500MG Histatrol Soln 2.75MG/ML Ortho-Prefest Tab 

Bensal HP 60MG-30MG/1GM Histussin HC 2.5-5-1/5 Pamelor Cap 10MG 

Bontril PDM Tab 35MG Hypaque-76 Inj Pamelor Cap 25MG 

Bontril Slow Cap ER 105MG Inderal LA Cap 60MG Panhematin IV 313MG 

Brethine Inj 1MG/ML Inderal LA Cap 80MG Phrenilin Forte 50-650 

Brevital Sodium 2.5GM Inderal LA Cap 120MG Prefest Tab 

Brevital Sodium Inj 2.5GM Inderal LA Cap 160MG Prevacid SoluTab 15MG 

Buprenex Inj 0.3MG/ML Inderal LA Cap ER 120MG Prevacid SoluTab 30MG 

Capital w/Codeine Sus Inderal LA Cap ER 160MG Prevpac Kit 

Cefazolin 1GM/50ML Inderal LA Cap ER 60MG Promit IV 150MG/1ML 

Cefotan Inj 1GM Inderal LA Cap ER 80MG Quelicin Inj 100MG/ML 

Cefotan Inj 2GM Indocin IV Pwd for Soln Quelicin Inj 20MG/1ML 

Cellcept Cap 250MG Indocin Susp 25MG/5ML Regonol Inj Soln 5MG/1ML 

Cenolate Inj 500MG/ML Infumorph 200 Inj Rejuvesol Inj 

Ceretec Kit Infumorph 500 Inj Rescon-MX Tab ER 

Cogentin Inj Soln 1MG/1ML Inversine Tab 2.5MG Robaxin Inj Soln 100MG/ML 

Cognex Cap 10MG Iodopen Inj 118MCG/1ML Robinul Inj Soln 0.2MG/ML 

Cognex Cap 20MG Isuprel Inj 0.2MG/ML Roxicet Tab 500MG-5MG 

Cognex Cap 30MG Kenalog Spr 0.147/GM Ryna-12 S Sus 

Cognex Cap 40MG Lacrisert Opth Dev 5MG Seconal Sodium Cap 100MG 

Combipatch 0.05MG-0.14MG Levo-Dromoran Tab 2MG Septra DS Tab 

Combipatch 0.05MG-0.25MG Liposyn III Inj 10% Sucraid Sol 8500 IU/ML 

Cortrosyn Inj 0.25MG Liposyn III Inj 20% Sulfoxyl Regular Lot 

Cosmegen IV 0.5MG Liposyn III IV Emul 10% Sulfoxyl Strong Lot 

Cuprimine Cap 250MG Liposyn III IV Emul 20% Sumycin Tab 250MG 

Cystadane 1GM/1Scoopful Locoid Oin 0.1% Sumycin Tab 500MG 

D.H.E. 45 Inj 1MG/ML Locoid Sol 0.1% Syprine Cap 250MG 

Dantrium IV 20MG Locoid Crm 0.1% Syrex Inj 0.9% 

Demser Cap 250MG Locoid Lipocrem 0.1% Tenormin Inj 0.5MG/ML 

Dermagraft Sheet Lymphazurin Inj 10MG/ML Testopel Pellets 75MG 

Page 29 GAO-10-201 Prescription Drug Pricing
Appendix II: Brand-name Prescription Drugs 

with an Extraordinary Price Increase, 2000 to 

2008 

Nonrepackaged brand name drugs 

Name and strength of drug Name and strength of drug Name and strength of drug 

Digoxin Soln 0.05MG/1ML Matulane Cap 50MG Tetanus To Inj 10LF/0.5ML 

Diprivan IV Emul 10MG/1ML Maxipime Inj 1GM Trasylol Inj 10,000kiu/ML 

Diuril Sodium IV 0.5GM Maxipime Inj 2GM Tricitrasol Cnt 46.7% 

Dopram IV Soln 20MG/1ML MD-Gastroview 66%-10% Tridesilon Cre 0.05% 

Duramorph Inj 0.5MG/1ML Mephyton Tab 5MG Tridesilon Oin 0.05% 

Duramorph Inj 1MG/1ML Methylin Chew Tab 10MG Trisenox IV Soln 1MG/1ML 

Duramorph PF Inj 1MG/ML Methylin Chew Tab 2.5MG Tuinal Cap 50MG 

Dynex Tab Methylin Chew Tab 5MG Uretron D/S Tab 

Edecrin Sodium Inj 50MG Methylin Soln 10MG/5ML Utira-C Tab 

Edecrin Tab 25MG Methylin Soln 5MG/5ML Virazole Sus 6GM 

Elliotts B Inj Minocin Cap 50MG Vitrasert Imp 4.5MG 

Ergotrate Tab 0.2MG Minocin Cap 100MG Westhroid Tab 130MG 

Erythrocin Lac Inj 500MG Muri-Lube Oil Westhroid Tab 32.5MG 

EtheDent Chew Tab 0.25MG Mustargen IV Pwd for Soln Westhroid Tab 65MG 

EtheDent Chew Tab 0.5MG Nascobal Gel 500mcg/0.1ML 

EtheDent Chew Tab 1MG Nembutal Sod Inj 50MG/ML 

Fareston Tab 60MG Nicomide Tab 

FazaClo Dis Tab 100MG Nitropress Inj 50MG 

FazaClo Dis Tab 25MG Norvir Cap 100MG 

Formalyde-10 Spr 10% Norvir Sol 80MG/ML 

Fosrenol Chew Tab 500MG Novahistine DH 7.25-2-5/5 

Geref Inj 50mcg NovaPlus Diprivan IV 10/1 

H.P. Acthar Gel 80U/1ML Nydrazid Inj 100MG/ML 

Source: GAO analysis of Red Book data. 

Note: Following the extraordinary price increase, some drugs may have become discontinued or 

transferred from one manufacturer to another. In some cases, an extraordinary price increase for a 

drug may not be attributed to the manufacturer that currently owns the drug. 

Page 30 GAO-10-201 Prescription Drug Pricing
Appendix III: Characteristics of Case Study 

Drugs 

Page 31 GAO-10-201 

Appendix III: Characteristics of Case Study 

Drugs 

To gain an understanding of the market dynamics leading to extraordinary 

price increases for brand-name drugs, we developed case studies of six 

brand-name drugs identified from our analysis of Red Book data. Selection 

for inclusion as a case study was based on several factors including price, 

the level of the percentage increase, whether the drug had more than one 

extraordinary price increase between 2000 and 2008, availability of the 

drug from multiple sources, and the permanence of the price increase. See 

table 8 for characteristics of the drugs selected for the case studies. 

Table 8: Summary of Characteristics of the Six Case Study Drugs 

Drug characteristics Drug A Drug B Drug C Drug D Drug E Drug F

Year of FDA approval 1987 1952 1969 1960 1985 1991

Year of unit price increase 2007 2001 and 2007 2004 and 2005 2004 2008 2001

Percent unit price increasea1,100 1,800 and 1,300 900 and 700 100 100 1,400

Patent status at time of price 

increase No patent No patent No patent No patent Under patentb

Under patent

Market exclusivity status at time of 

price increasec

None None None None None None

Repackaged drug No No No No No Yesd

Year of drug acquisitione2007 2001 1998 2000 N/AfN/Ag

Generic equivalent available on 

the market at time of price 

increaseh

Yes No No No Noi

No

Drug available through patient 

assistance programj

No Yes Yes No No Yesk

Drug is considered low volume 

or high volumel

Low volume Low volume Low volume Low volume Low volume High volumem

Source: GAO analysis of Red Book and interviews with drug company representatives. 

Note: Changes in unit prices are calculated using average wholesale price (AWP) in Thomson 

Reuters’ Red Book. An extraordinary price increase is a unit price increase equal to 100 percent or 

more at a single point in time from 2000 to 2008. Patent status is reported as of the date the 

extraordinary price increase occurred. 

a

Percent increase is rounded to the nearest hundred percent. 

b

This drug had a method-of-use patent. 

c

The Federal Food, Drug, and Cosmetics Act authorizes various periods of market exclusivity for new 

drug products. Generally, market exclusivities prevent the Food and Drug Administration (FDA) from 

approving any application for a competing drug compound for a stated period of time. 

d

This drug was sold by a repackager. The price of the drug was set by the repackager and not the 

manufacturer. 

e

Indicates the year that the rights to the drug were acquired from the previous manufacturer. 

f

This company owns the original rights to the drug. 

g

This drug was sold by a repackager. 

h

This information was obtained from the companies and publicly available information from the FDA. 

i

This drug’s active ingredient is available as a generic in other dosage forms. 

Prescription Drug Pricing 
Appendix III: Characteristics of Case Study 

Drugs 

j

Patient assistance programs are typically established to offer a company’s drug products at low or no 

cost to low-income, underinsured, or uninsured individuals. 

k

This drug was sold by a repackager. At the time of its extraordinary price increase, the drug was 

available through the manufacturer’s patient assistance program. 

l

Drug companies were asked to identify their drug as either low volume or high volume, depending on 

the amount manufactured annually. 

m

The manufacturer of the drug said that this drug was a high-volume product at the time of its 

extraordinary price increase. The repackager told us it sold a small amount of the drug at the time of 

its extraordinary price increase. 

Page 32 GAO-10-201 Prescription Drug Pricing
Appendix IV: 

A

GAO Contact and Staff 

cknowledgments 

Page 33 GAO-10-201 

Appendix IV: GAO Contact and Staff 

Acknowledgments 

John E. Dicken at (202) 512-7114 or Dickenj@gao.gov. GAO Contact 

In addition to the contact named above, Martin T. Gahart, Assistant 

Director; N. Rotimi Adebonojo; Rashmi Agarwal; George Bogart; 

Kristin Helfer Koester; Martha Kelly; Yesook Merrill; Giao N. Nguyen; 

Daniel Ries; and Timothy Walker made major contributions to this report. 

Acknowledgments 

Prescription Drug Pricing 
Related GAO Products Related GAO Products 

Medicaid Outpatient Prescription Drugs: Second Quarter 2008 Federal 

Upper Limits for Reimbursement Compared with Average Retail 

Pharmacy Acquisition Costs. GAO-10-118R. Washington, D.C.: 

November 30, 2009. 

Prescription Drugs: Overview of Approaches to Control Prescription 

Drug Spending in Federal Programs. GAO-09-819T. Washington, D.C.: 

June 24, 2009. 

Medicare Part D Prescription Drug Coverage: Federal Oversight of 

Reported Price Concessions Data. GAO-08-1074R. Washington, D.C.: 

September 30, 2008. 

Prescription Drugs: Trends in Usual and Customary Prices for Drugs 

Frequently Used by Medicare and Non-Medicare Health Insurance 

Enrollees. GAO-07-1201R. Washington, D.C.: September 7, 2007. 

Prescription Drugs: Oversight of Drug Pricing in Federal Programs. 

GAO-07-481TT. Washington, D.C.: February 9, 2007. 

Prescription Drugs: An Overview of Approaches to Negotiate Drug Prices 

Used by Other Countries and U.S. Private Payers and Federal Programs. 

GAO-07-358TT. Washington, D.C.: January 11, 2007. 

Medicaid Outpatient Prescription Drugs: Estimated 2007 Federal Upper 

Limits for Reimbursement Compared with Retail Pharmacy Acquisition 

Costs. GAO-07-239R. Washington, D.C.: December 22, 2006. 

Prescription Drugs: Price Trends for Frequently Used Brand and 

Generic Drugs from 2000 through 2004. GAO-05-779. Washington, D.C.: 

August 15, 2005. 

Medicaid Drug Rebate Program: Inadequate Oversight Raises Concerns 

about Rebates Paid to States. GAO-05-102. Washington, D.C.: February 4, 

2005. 

Medicaid: States’ Payments for Outpatient Prescription Drugs. 

GAO-06-69R. Washington, D.C.: October 31, 2005. 

Federal Employees’ Health Benefits: Effects of Using Pharmacy Benefit 

Managers on Health Plans, Enrollees, and Pharmacies. GAO-03-196. 

Washington, D.C.: January 10, 2003. 

Page 34 GAO-10-201 Prescription Drug Pricing
Related GAO Products 

Prescription Drugs: Expanding Access to Federal Prices Could Cause 

Other Price Changes. GAO/HEHS-00-118. Washington, D.C.: August 7, 

2000. 

(290744) Page 35 GAO-10-201 Prescription Drug Pricing
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