Drugmakers Hike Prices of Meds Facing Generic Competition

But the silver lining for consumers is that an unprecedented number of top brand-name prescription drugs are due to lose patent protection in the next couple of years — opening the way for generic versions that cost far less.

Blockbuster drugs expected to go off patent this year include Lipitor (used for high cholesterol), Xalatan (glaucoma) and Zyprexa (schizophrenia). In 2012 patents are scheduled to expire for Clarinex (allergies), Lexapro (depression), Avandia (diabetes), Plavix (blood clots), Seroquel (psychosis) and several drugs used to combat cholesterol and high blood pressure.

An analysis by AARP Rx Price Watch Report, released today, finds a consistent pattern of steep price hikes among brand drugs a year or so before they face generic competition. One reason for the increase, the report suggests, is "the unprecedented number of drugs that will be going off patent and facing generic price competition in the next few years, which may have led some manufacturers to increase their prices in an effort to maintain corporate revenue and profits."

AARP has been tracking the retail prices of widely used drugs since 2004. Its new report finds that cumulatively "the retail price of brand-name drugs that have faced generic competition in 2010 rose by 51 percent … between the end of 2004 and the end of 2009," which equals an average hike of $762 for one year of therapy between those two dates. "Much of this increase took place in the two years" before lower-cost generic versions appeared on the market, the report adds.

The first generics for the prostate drug Flomax, for example, came on the market last year. In its last two years of patent protection, Flomax's price increased by 17 percent in 2008 and by 24.8 percent in 2009, AARP researchers found.

Next: Drug patents expected to expire in 2012. >>