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Prescription Drug Pricing: Implications for Retail Pharmacies

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Report Type Reports and Testimonies
Report Date Sept. 19, 1996
Report No. T-HEHS-96-216
Subject
Summary:

Congressional hearings during the late 1980s highlighted the fact that the prices that consumers paid for prescription drugs were increasing more rapidly than the rate of inflation. In 1990, Congress tried to control prescription drug expenditures by significantly changing the way that Medicaid pays for outpatient drugs. Vertical integration in the pharmaceutical market later became a concern, particularly mergers between large drug companies and pharmacy benefit managers. This testimony responds to the following three questions: How and why has the process by which drugs get from manufacturers to patients changed? What have been the consequences for retail pharmacies of changes in this process? What general strategies are retail pharmacies undertaking or proposing to respond to an increasingly competitive environment?

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