This is the accessible text file for GAO report number GAO-11-306R entitled 'Prescription Drugs: Trends in Usual and Customary Prices for Commonly Used Drugs' which was released on March 14, 2011. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. 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GAO-306R: United States Government Accountability Office: Washington, DC 20548: February 10, 2011: Congressional Requesters: Subject: Prescription Drugs: Trends in Usual and Customary Prices for Commonly Used Drugs: Prescription drug spending in 2009 totaled approximately $250 billion, of which $78 billion--or about 31 percent--was spent by the federal government.[Footnote 1] Prescription drug spending by the federal government, patients, and third-party payers, including employers, is driven by many factors, including the prices paid for drugs. In 2007 we reported on trends in retail prices--known as usual and customary (U&C) prices--for prescription drugs.[Footnote 2] We found that the average U&C price for the commonly used brand-name prescription drugs we reviewed increased about 6 percent per year from January 2000 through January 2007.[Footnote 3] Some media reports[Footnote 4] have suggested that prescription drug prices may have increased more during the debate leading up to passage of the Patient Protection and Affordable Care Act (PPACA) in March 2010 compared to other recent years.[Footnote 5] We were requested to examine recent trends in drug prices for brand- name and generic pharmaceuticals. In this report, we (1) examine U&C price trends for commonly used prescription drugs from 2006 through the first quarter of 2010, the latest available data at the time of our analysis, and compare these trends to those of other medical consumer goods and services, and (2) examine price trends using drug prices other than U&C. You also asked us to provide information on the extent to which prices for individual brand-name drugs changed over the course of this analysis period. We have provided this information in an enclosure. In order to determine U&C price trends from 2006 through the first quarter of 2010, we selected four baskets of drugs that were commonly used by consumers during our analysis period. To select our baskets, we used prescription drug utilization data from the Blue Cross Blue Shield Federal Employee Program (BCBS FEP), a large, nationwide insurance plan that covers nearly 5 million individuals.[Footnote 6] We selected the first basket of drugs based on drug name in order to examine overall price trends of both brand-name and generic drugs. We used BCBS FEP utilization data to identify 100 commonly used drugs, and we considered the brand-name and generic versions to be distinct drugs with distinct levels of utilization.[Footnote 7] We selected the second and third baskets of drugs to examine trends for brand-name and for generic drugs separately. The second and third baskets of drugs were subsets of the first basket and contained the 55 brand-name and the 45 generic drugs,[Footnote 8] respectively, from the first basket of 100 drugs. We selected the fourth basket of drugs in order to account for the growing national shift in consumer utilization from brand-name to generic versions of drugs. We used BCBS FEP utilization data to again select 100 commonly used drugs--this time based on the active ingredient rather than drug name.[Footnote 9] In selecting this fourth basket of drugs based on active ingredient, we considered the brand-name and generic versions of drugs with the same active ingredient to be the same drug. The degree of overlap between the contents of the fourth basket and the first basket was high: at least 95 percent of the utilization in one basket was also in the other. To report the U&C price trends, we calculated quarterly changes in the average price of each basket of drugs from 2006 through the first quarter of 2010 using quarterly price indexes. For each index, we used the first quarter of 2006 as a baseline with an assigned value of 100 and calculated change over each quarter as an expressed value above or below 100. We relied on U&C data from Pennsylvania's Pharmaceutical Assistance Contract for the Elderly (PACE) program as our main data source because they were actual retail prices that pharmacies charged to cash-paying consumers for prescription drugs and were available across our entire analysis period. We compared the drug price indexes we constructed to the average annual change from 2006 through first quarter 2010 in the consumer price index for medical goods and services (medical CPI) and in the broader consumer price index for all consumer goods for urban consumers (CPI-U), both of which are publicly available from the Bureau of Labor Statistics. The medical CPI--which includes prescription and nonprescription drugs, medical equipment, and services--makes up about 6.5 percent of the CPI-U; the remaining 93.5 percent of this broader index reflects changes in prices for other (nonmedical) consumer goods and services.[Footnote 10] In order to determine price trends using drug prices other than U&C, we created three separate price indexes using three additional measures of drug prices. We calculated the indexes using these three additional measures of drug prices for our first basket of 100 drugs following the same methodology used to construct the U&C price index. We used average wholesale prices (AWP), which are "list prices" reported by manufacturers; average manufacturer prices (AMP), which are average prices paid to manufacturers by wholesalers and other purchasers; and Medicare Part D Plan Finder negotiated prices (Part D), which are prices negotiated between participating Part D plans and pharmacies for Medicare Part D consumers.[Footnote 11] We obtained AWP data from Red Book[Footnote 12] and both AMP and Part D Plan Finder data from the Centers for Medicare & Medicaid Services (CMS). The results of our analyses are limited to the commonly used prescription drugs in our baskets and cannot be generalized to all prices nationally for all drugs. In addition, the U&C analyses are limited to prices reported by retail pharmacies in Pennsylvania to the PACE program and cannot be generalized to all U&C prices nationally for all drugs. We reviewed data from BCBS FEP, CMS, Red Book, and the PACE program for reasonableness and consistency, including screening for outlier prices and examining possible reasons for inconsistencies between the data sources. We also reviewed documentation and talked to data providers about steps they take to ensure data reliability. We determined that these data were sufficiently reliable for our purposes. We conducted this performance audit from April 2010 through January 2011 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. (See enclosure I for a detailed discussion of our scope and methodology and enclosure II for a listing of the drugs in each basket.) Results in Brief: We found that the U&C price index for our first basket of 100 commonly used prescription drugs increased at an average annual rate of 6.6 percent from 2006 through the first quarter of 2010 compared with a 3.8 percent average annual increase in the medical CPI.[Footnote 13] The increase in the price index from the first quarter of 2009 through the first quarter of 2010--prior to passage of health reform in March 2010--was 5.9 percent, less than the increase for the 2 years prior but higher than in 2006. We also found that the U&C price index for our second basket of 55 brand-name drugs increased at an average annual rate of 8.3 percent during our time period. In contrast, the U&C price index for our third basket of 45 generic drugs decreased at an average annual rate of 2.6 percent. Finally, when shifts in consumer utilization between brand-name and generic versions of the same drug were included in the analysis using our fourth basket of drugs selected by active ingredient, the U&C price index increased about 2.6 percent per year, a much lower rate than the 6.6 percent annual increase observed when shifts in utilization were not included. We found that price trends for the 100 drugs in our first basket as measured using drug prices other than U&C also increased from 2006 through the first quarter of 2010, but at a somewhat slower rate than the 6.6 percent rate for the U&C price index. For example, the AWP price index increased at an average annual rate of 6.0 percent while the AMP price index increased at an average annual rate of 5.3 percent. The Part D price index--which was measured from 2007 through the first quarter of 2010--increased at an average annual rate of 6.8 percent, slightly less than the U&C price index of 7.0 percent when measured across the same period. For additional details on our results, see enclosure III. We also provide information on the extent to which prices for individual brand- name drugs changed over the course of our analysis period in enclosure IV. We did not obtain external comments on a draft of this report because we did not evaluate the programs of the organizations that provided us data. 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 relevant congressional committees and other interested members. The report also will be available at no charge on the GAO Web site at [hyperlink, http://www.gao.gov]. If you or your staff have any questions regarding this report, please contact me at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff members who made key contributions to this report are listed in enclosure V. Signed by: John E. Dicken: Director, Health Care: Enclosures - 5: List of Requesters: The Honorable Henry A. Waxman: Ranking Member: Committee on Energy and Commerce: House of Representatives: The Honorable Sander M. Levin: Ranking Member: Committee on Ways and Means: House of Representatives: The Honorable Pete Stark: Ranking Member: Subcommittee on Health: Committee on Ways and Means: House of Representatives: The Honorable John Lewis: Ranking Member: Subcommittee on Oversight: Committee on Ways and Means: House of Representatives: The Honorable Charles B. Rangel: House of Representatives: [End of section] Enclosure I: Scope and Methodology: In order to determine usual and customary (U&C) price trends from 2006 through the first quarter of 2010, we selected four baskets of drugs that were commonly used by consumers during our analysis period. [Footnote 14] To select our baskets, we used prescription drug utilization data from the Blue Cross Blue Shield Federal Employee Program (BCBS FEP), a large, nationwide insurance plan that covers nearly 5 million individuals.[Footnote 15] We used data from the first quarter of 2006 to identify the most commonly dispensed 30-day supply for each drug and then used this quantity to determine the corresponding number of 30-day equivalents represented by each claim. We also used data from the Food and Drug Administration (FDA) and Red Book[Footnote 16] to determine the brand-name or generic status of each drug at the beginning and end of our analysis period. We selected the first basket of drugs based on drug name in order to examine overall price trends of both brand-name and generic drugs over our time period. We used BCBS FEP utilization data to select 100 commonly used drugs. We aggregated all claims with the same drug name, strength, route of administration, and dosage form in order to determine which drugs had the highest utilization. For example, all claims for "Zocor/10mg/oral/tablet" were combined as one drug. Using this drug name approach, the brand-name and generic versions of a drug were aggregated separately. For example, "Zocor/10mg/oral/tablet" and "simvastatin/10mg/oral/tablet" would be considered different drugs for purposes of our first basket because they have different names, even though they are the brand-name and generic versions of drugs containing the same active ingredient. The first drug basket contained 45 percent of all BCBS FEP 30-day equivalent prescriptions from the first quarter of 2006. We selected the second and third baskets of drugs to examine trends for brand-name and for generic drugs separately. The second basket contained the 55 brand-name drugs from among the 100 commonly used drugs in the first basket, including 35 drugs that were single-source throughout our analysis period and 20 drugs that transitioned from single-source to brand-name multisource during the analysis period.[Footnote 17] Because these two groups of drugs experienced similar price changes, we included both in our second basket of 55 brand-name drugs. The third basket contained the remaining 45 drugs from among the 100 commonly used drugs in the first basket, including 40 generic drugs and 5 drugs that were brand-name multisource during the entire analysis period.[Footnote 18] Because these two groups of drugs experienced similar price changes, we included both in our third basket of 45 generic drugs. We selected the fourth basket of drugs in order to account for the growing national shift in consumer utilization from brand-name to generic versions of drugs. We used BCBS FEP utilization data to again select 100 commonly used drugs--this time based on the active ingredient rather than drug name. We aggregated all claims with the same active ingredient, strength, route of administration, and dosage form. For example, all claims with "simvastatin" as the active ingredient and "10mg/oral/tablet" as the strength, route of administration, and dosage form were aggregated as a single drug. Using this approach, the brand-name and generic versions of a drug were combined and counted as one drug. For example, "Zocor/10mg/oral/tablet" and "simvastatin/10mg/oral/tablet" would be considered the same drug for purposes of this fourth basket because they are the brand-name and generic versions of drugs with the same active ingredient, even though they have different names. Under this approach for example, if consumer utilization of a particular drug in the basket shifts over time from a higher priced brand-name drug to a lower priced generic version of that drug, the generic version becomes increasingly more heavily weighted and thus will have an increasingly greater influence on the price change for the basket. The fourth drug basket contained 49 percent of all BCBS FEP 30-day equivalent prescriptions from the first quarter of 2006. The degree of overlap between the contents of the fourth basket and the first basket was high: at least 95 percent of the utilization in one basket was also in the other. To report the U&C price trends, we calculated quarterly changes in the average price of each basket of drugs from 2006 through the first quarter of 2010 using utilization-weighted price indexes as described below. We relied on U&C prices as our main data source because they were actual retail prices that pharmacies charged to cash-paying consumers for prescription drugs and were available across our entire analysis period. The U&C prices were obtained from Pennsylvania's Pharmaceutical Assistance Contract for the Elderly (PACE) program. [Footnote 19] We used quarterly price indexes to compare drug prices from our baseline quarter (the first quarter of 2006) to prices in subsequent quarters. Price indexes were constructed by dividing the average quarterly price for a basket of drugs by the average price of the basket in the first quarter of 2006 and multiplying by 100. As a result, if the average price for a basket of drugs in a given quarter was higher than the average price in the baseline quarter, the resulting price index for that quarter was above 100, while an average quarterly price that was lower than the baseline price resulted in a price index below 100. To calculate average quarterly prices for each drug in our baskets, we first determined the average quarterly price for each national drug code (NDC) and multiplied that price by its BCBS FEP utilization for that quarter, then summed the results for all NDCs corresponding to a given drug. To calculate an average quarterly price for each basket, we multiplied the resulting quarterly price for each drug by its BCBS FEP utilization during the first quarter of 2006 and summed across all drugs in the basket. We then divided the resulting average quarterly price for each basket by its average price in the baseline quarter to produce quarterly price indexes with a baseline of 100 in the first quarter of 2006. We compared the U&C price indexes we constructed to the average annual change from 2006 through first quarter 2010 in the consumer price index for medical goods and services (medical CPI) and in the broader consumer price index for all consumer goods for urban consumers (CPI- U), both of which are publicly available from the Bureau of Labor Statistics. The medical CPI--which includes prescription and nonprescription drugs, medical equipment, and services--makes up about 6.5 percent of the CPI-U; the remaining 93.5 percent of this broader index reflects changes in prices for other (nonmedical) consumer goods and services.[Footnote 20] In order to determine price trends using drug prices other than U&C, we created three separate price indexes using three additional measures of drug prices. We calculated the indexes for our first basket of 100 drugs following the same methodology used to construct the U&C price index. We used average wholesale price (AWP)--"list prices" reported by manufacturers--from Red Book; average manufacturer price (AMP)--average prices paid to manufacturers by wholesalers and other purchasers--from the Centers for Medicare & Medicaid Services (CMS); and Medicare Part D Plan Finder (Part D) data--prices negotiated between participating Part D plans and pharmacies for Medicare Part D consumers--from CMS.[Footnote 21] The price index that we calculated using AMP data should be interpreted with caution for several reasons. First, CMS changed the calculation of AMP in accordance with the Deficit Reduction Act of 2005 starting on October 1, 2007.[Footnote 22] In addition, we previously reported significant variations in the monthly AMP data reported to CMS for many drugs. [Footnote 23] Finally, a 2010 report by the Department of Health and Human Services Office of Inspector General (HHS OIG) found significant manufacturer noncompliance with the requirements for reporting AMPs to CMS.[Footnote 24] In addition, 11 of the 100 drugs in our first basket did not have Part D pricing data for one or more quarters of our analysis period and therefore were removed from the basket when calculating the Part D price indexes to ensure that the same number of drugs were present in each quarter. These 11 drugs represent 8.0 percent of the utilization of this basket. Our analyses are limited to the commonly used prescription drugs in our basket and cannot be generalized to all prescription drugs. In addition, our U&C analyses are limited to prices reported by retail pharmacies in Pennsylvania to the PACE program and cannot be generalized to all U&C prices nationally for all drugs. We reviewed all data from BCBS FEP, CMS, Red Book, and the PACE program for reasonableness and consistency, including screening for outlier prices and examining possible reasons for inconsistencies between the data sources. We also reviewed documentation and talked to data providers about steps they take to ensure data reliability. We determined that these data were sufficiently reliable for our purposes. We conducted this performance audit from April 2010 through January 2011 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. [End of Enclosure I] Enclosure II: Drugs Included in Analyses: Table 1 lists the 100 commonly used prescription drugs based on drug name that were used in constructing quarterly price indexes from the first quarter of 2006 through the first quarter of 2010 for our first, second, and third baskets of drugs. Of these 100 drugs used in our first basket, 35 were single-source brand-name drugs throughout our analysis period and 20 additional drugs changed status from single- source to brand-name multisource during our analysis period. Because these two groups of drugs experienced similar price changes, we included both in our second basket of 55 brand-name drugs. Of the remaining 45 commonly used prescription drugs, 40 were generic and 5 were brand-name multisource throughout our analysis period. Because these two groups of drugs experienced similar price changes, we included both in our third basket of 45 generic drugs. Table 2 lists the drugs in our fourth basket of 100 commonly used prescription drugs based on active ingredient that were used in constructing quarterly price indexes that included shifts in BCBS FEP enrollee utilization between brand-name and generic versions of the same drug from the first quarter of 2006 through the first quarter of 2010. Table 1: The 100 Commonly Used Prescription Drugs Used to Construct Quarterly Price Indexes from 2006 through the First Quarter of 2010, by Drug Name: The 55 brand-name drugs: Drug name, strength, route of administration, and dosage form: Aciphex (20mg/oral/tablet, ente); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Actonel (35mg/oral/tablet)[A]; Most common 30-day supply: 4. Drug name, strength, route of administration, and dosage form: Advair Diskus 250/50 (0.25mg-0.05m/inhalation/disk); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Altace (10mg/oral/capsule)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Altace (5mg/oral/capsule)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Ambien (10mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Aricept (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Avandia (4mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Celebrex (200mg/oral/capsule); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Clarinex (5mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Cozaar (50mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Crestor (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Detrol LA (4mg/oral/capsule (ER)); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Diovan (160mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Diovan (80mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Diovan HCT (12.5mg-160mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Effexor- XR(150mg/oral/capsule (ER)); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Effexor- XR (75mg/oral/capsule (ER)); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Evista (60mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Flomax (0.4mg/oral/capsule); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Flonase (0.05mg/actua/nasal/spray)[A]; Most common 30-day supply: 16. Drug name, strength, route of administration, and dosage form: Fosamax (70mg/oral/tablet)[A]; Most common 30-day supply: 4. Drug name, strength, route of administration, and dosage form: Hyzaar (25mg-100mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lantus (100u/1ml/subcutaneous/solution); Most common 30-day supply: 10. Drug name, strength, route of administration, and dosage form: Lexapro (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lexapro (20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lipitor (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lipitor (20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lipitor (40mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lotrel (5mg-20mg/oral/capsule)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lumigan (0.03%/ophthalmic/solution); Most common 30-day supply: 5. Drug name, strength, route of administration, and dosage form: Mobic (7.5mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Nasonex (0.05mg/actua/nasal/spray); Most common 30-day supply: 17. Drug name, strength, route of administration, and dosage form: Nexium (40mg/oral/capsule (DR)); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Niaspan (500mg/oral/tablet (ER)); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Norvasc (10mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Norvasc (5mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Plavix (75mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Pravachol (40mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Premarin (0.625mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Prevacid (30mg/oral/capsule (DR))[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Protonix (40mg/oral/tablet, ente)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Singulair (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Toprol XL (100mg/oral/tablet (ER))[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Toprol XL (25mg/oral/tablet (ER))[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Toprol XL (50mg/oral/tablet (ER))[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Tricor (145mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Vytorin (10mg-20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Vytorin (10mg-40mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Xalatan (0.005%/ophthalmic/solution); Most common 30-day supply: 2. Drug name, strength, route of administration, and dosage form: Zetia (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Zocor (20mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Zocor (40mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Zoloft (100mg/oral/tablet)[A]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Zoloft (50mg/oral/tablet)[A]; Most common 30-day supply: 30. The 45 generic drugs[B]: Drug name, strength, route of administration, and dosage form: Allopurinol (100mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Allopurinol (300mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Alprazolam (0.5mg/oral/tablet); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Amitriptyline HCL (25mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Atenolol (100mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Atenolol (25mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Atenolol (50mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Clonazepam (0.5mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Clonazepam (1mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Enalapril maleate (20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Fexofenadine HCL (180mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Fluoxetine HCL (20mg/oral/capsule); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Furosemide (20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Furosemide (40mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Gabapentin (300mg/oral/capsule); Most common 30-day supply: 90. Drug name, strength, route of administration, and dosage form: Glimepiride (4mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Glyburide (5mg/oral/tablet); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: HCTZ/ lisinopril (12.5mg-20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: HCTZ/ triamterene (25mg-37.5mg/oral/capsule); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: HCTZ/ triamterene (37.5mg-25mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Hydrochlorothiazide (12.5mg/oral/capsule); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Hydrochlorothiazide (25mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Isosorbide mononitrate (30mg/oral/tablet (ER)); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Klor- Con 10 (10meq/oral/tablet (ER))[C]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Klor- Con m20 (20meq/oral/tablet (ER))[C]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Levothyroxine sodium (0.05mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lisinopril (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lisinopril (20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lisinopril (40mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lisinopril (5mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Lorazepam (1mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Metformin HCL (1000mg/oral/tablet); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Metformin HCL (500mg/oral/tablet (ER)); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Metformin HCL (500mg/oral/tablet); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Metoprolol tartrate (50mg/oral/tablet); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Paroxetine HCL (20mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Prednisone (10mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Prednisone (5mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Ranitidine HCL (150mg/oral/tablet); Most common 30-day supply: 60. Drug name, strength, route of administration, and dosage form: Spironolactone (25mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Synthroid (0.05mg/oral/tablet)[C]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Synthroid (0.075mg/oral/tablet)[C]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Synthroid (0.1mg/oral/tablet)[C]; Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Trazodone HCL (50mg/oral/tablet); Most common 30-day supply: 30. Drug name, strength, route of administration, and dosage form: Warfarin sodium (5mg/oral/tablet); Most common 30-day supply: 30. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program, drug status data from the Food and Drug Administration and Red Book, and national drug code data from Red Book. Notes: Eleven of the 100 drugs had no Medicare Part D data for one or more quarters of our analysis period and were therefore excluded from the calculation of Part D price indexes. These 11 drugs represented 8.0 percent of the total utilization for the basket. [A] Drug transitioned from single-source to brand-name multisource during our analysis period. [B] Five of these drugs were brand-name multisource drugs during our entire analysis period. Because these five drugs had generic equivalents available from multiple manufacturers, were marketed under their brand name, and experienced price changes most similar to the 40 generic drugs in our sample, we included them in our third basket of generic drugs. [C] Drug was brand-name multisource during our entire analysis period. [End of table] Table 2: The 100 Commonly Used Prescription Drugs Used in Constructing Quarterly U&C Price Indexes That Included Shifts in Blue Cross Blue Shield Federal Employee Program Enrollee Utilization between Brand- name and Generic Versions of the Drugs from 2006 through the First Quarter of 2010, by Active Ingredient: Active ingredient, strength, route of administration, and dosage form: Alendronate sodium (70mg/oral/tablet); Most common 30-day supply: 4. Active ingredient, strength, route of administration, and dosage form: Allopurinol (300mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Alprazolam (0.5mg/oral/tablet); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Amlodipine besylate (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Amlodipine besylate (5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Amlodipine besylate-benazepril hydr (5mg-20mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Atenolol (25mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Atenolol (50mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Atorvastatin calcium (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Atorvastatin calcium (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Atorvastatin calcium (40mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Bimatoprost (0.03%/ophthalmic/solution); Most common 30-day supply: 5. Active ingredient, strength, route of administration, and dosage form: Celecoxib (200mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Clonazepam (0.5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Clonazepam (1mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Clopidogrel hydrogen sulfate (75mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Conjugated estrogens (0.625mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Desloratadine (5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Digoxin (0.125mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Digoxin (0.25mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Diltiazem hydrochloride (240mg/oral/capsule (ER); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Enalapril maleate (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Escitalopram oxalate (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Escitalopram oxalate (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Esomeprazole magnesium (40mg/oral/capsule (DR)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Ezetimibe (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Ezetimibe-simvastatin (10mg-20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Ezetimibe-simvastatin (10mg-40mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Fenofibrate (145mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Fexofenadine hydrochloride (180mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Fluoxetine hydrochloride (20mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Fluticasone propionate (0.05mg/actua/nasal/spray); Most common 30-day supply: 16. Active ingredient, strength, route of administration, and dosage form: Fluticasone propionate-salmeterol x (0.25mg-0.05m/inhalation/disk); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Furosemide (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Furosemide (40mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Gabapentin (300mg/oral/capsule); Most common 30-day supply: 90. Active ingredient, strength, route of administration, and dosage form: Glimepiride (4mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide (12.5mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide (25mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide-lisinopril (12.5mg-20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide-losartan potass (25mg-100mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide-triamterene (25mg-37.5mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide-triamterene (25mg-37.5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Hydrochlorothiazide-valsartan (12.5mg-160mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Insulin aspart (100u/1ml/subcutaneous/solution); Most common 30-day supply: 15. Active ingredient, strength, route of administration, and dosage form: Insulin human glargine (100u/1ml/subcutaneous/solution); Most common 30-day supply: 10. Active ingredient, strength, route of administration, and dosage form: Lansoprazole (30mg/oral/capsule (DR)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Latanoprost (0.005%/ophthalmic/solution); Most common 30-day supply: 2. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.025mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.05mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.075mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.088mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.125mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.15mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Levothyroxine sodium (0.1mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Lisinopril (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Lisinopril (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Lisinopril (40mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Lisinopril (5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Lorazepam (1mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Losartan potassium (50mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Meloxicam (7.5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Metformin hydrochloride (1000mg/oral/tablet); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Metformin hydrochloride (500mg/oral/tablet (ER)); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Metformin hydrochloride (500mg/oral/tablet); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Metoprolol succinate (100mg/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Metoprolol succinate (25mg/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Metoprolol succinate (50mg/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Metoprolol tartrate (50mg/oral/tablet); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Mometasone furoate (0.05mg/actua/nasal/spray); Most common 30-day supply: 17. Active ingredient, strength, route of administration, and dosage form: Montelukast sodium (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Niacin (500mg/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Pantoprazole sodium (40mg/oral/tablet, ente); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Paroxetine hydrochloride (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Potassium chloride (10meq/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Potassium chloride (20meq/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Pravastatin sodium (40mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Prednisone (5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Rabeprazole sodium (20mg/oral/tablet, ente); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Raloxifene hydrochloride (60mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Ramipril (10mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Ramipril (5mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Ranitidine hydrochloride (150mg/oral/tablet); Most common 30-day supply: 60. Active ingredient, strength, route of administration, and dosage form: Risedronate sodium (35mg/oral/tablet); Most common 30-day supply: 4. Active ingredient, strength, route of administration, and dosage form: Rosiglitazone maleate (4mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Rosuvastatin calcium (10mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Sertraline hydrochloride (100mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Sertraline hydrochloride (50mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Simvastatin (20mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Simvastatin (40mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Spironolactone (25mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Tamsulosin hydrochloride (0.4mg/oral/capsule); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Tolterodine tartrate (4mg/oral/capsule (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Trazodone hydrochloride (50mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Valsartan (160mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Valsartan (80mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Venlafaxine hydrochloride (75mg/oral/capsule (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Verapamil hydrochloride (240mg/oral/tablet (ER)); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Warfarin sodium (5mg/oral/tablet); Most common 30-day supply: 30. Active ingredient, strength, route of administration, and dosage form: Zolpidem tartrate (10mg/oral/tablet); Most common 30-day supply: 30. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and national drug code data from Red Book. [End of table] [End of Enclosure II] Enclosure III: Changes in Drug Price Indexes, 2006 through the First Quarter of 2010: Figure 1: Annual Change in the Usual and Customary (U&C) Price Index for a Basket of 100 Commonly Used Prescription Drugs and the Medical CPI, 2006 through the First Quarter of 2010: [Refer to PDF for image: vertical bar graph] Calendar year: 2006, Q1 - 2007, Q1; U&C: 5.4%; Medical CPI: 4.2%. Calendar year: 2007, Q1 - 2008, Q1; U&C: 8.1%; Medical CPI: 4.7%. Calendar year: 2008, Q1 - 2009, Q1; U&C: 7.0%; Medical CPI: 2.8%. Calendar year: 2009, Q1 - 2010, Q1; U&C: 5.9%; Medical CPI: 3.6%. Calendar year: Average 2006, Q1 - 2010, Q1; U&C: 6.6%. Medical CPI: 3.8%[A]. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program, U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program, and Medical CPI data from the Bureau of Labor Statistics. [A] The broader CPI-U increased at an average annual rate of 2.2 percent from the first quarter of 2006 through the first quarter of 2010. [End of figure] Figure 2: Usual and Customary (U&C) Price Index for a Basket of 100 Commonly Used Prescription Drugs, 2006 through the First Quarter of 2010: [Refer to PDF for image: line graph] Date: 2006 Q1; Index: 100. Date: 2006 Q2; Index: 101.4. Date: 2006 Q3; Index: 102.5. Date: 2006 Q4; Index: 102.8. Date: 2007 Q1; Index: 105.4. Date: 2007 Q2; Index: 106.1. Date: 2007 Q3; Index: 107.8. Date: 2007 Q4; Index: 109.4. Date: 2008 Q1; Index: 113.9. Date: 2008 Q2; Index: 115.5. Date: 2008 Q3; Index: 116.7. Date: 2008 Q4; Index: 118.2. Date: 2009 Q1; Index: 121.8. Date: 2009 Q2; Index: 123.8. Date: 2009 Q3; Index: 125.5. Date: 2009 Q4; Index: 125.3. Date: 2010 Q1; Index: 129.1. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program. Note: The index value of 129.1 indicates an increase of 29.1 percent in the average U&C price for the basket of 100 commonly used drugs during our analysis period. [End of figure] Figure 3: Annual Change in the Usual and Customary (U&C) Price Index for a Basket of Commonly Used Brand-name Drugs (55) and Generic Drugs (45), 2006 through the First Quarter of 2010: [Refer to PDF for image: vertical bar graph] Date: 2006 Q1 - 2007 Q1; Brand-name: 8.1%; Generic: -6.9%. Date: 2007 Q1 - 2008 Q1; Brand-name: 9.6%; Generic: -0.1%. Date: 2008 Q1 - 2009 Q1; Brand-name: 8.5%; Generic: -1.7%. Date: 2009 Q1 - 2010 Q1; Brand-name: 7.1%; Generic: -1.5%. Date: Average 2006 Q1 - 2010 Q1; Brand-name: 8.3%; Generic: -2.6%. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program. Notes: The brand-name drug basket included 35 single-source drugs and 20 drugs that changed from single-source to brand-name multisource during our analysis period. The generic drug basket included 40 generic drugs and 5 brand-name multisource drugs. [End of figure] Figure 4: Usual and Customary (U&C) Price Indexes for a Basket of Commonly Used Brand-name Drugs (55) and Generic Drugs (45), 2006 through the First Quarter of 2010: [Refer to PDF for image: multiple line graph] Date: 2006, Q1; Brand-name: 100; Generic: 100. Date: 2006, Q2; Brand-name: 101.8; Generic: 99.6. Date: 2006, Q3; Brand-name: 102.2; Generic: 99.3. Date: 2006, Q4; Brand-name: 104.3; Generic: 95.8. Date: 2007, Q1; Brand-name: 108.1; Generic: 93.1. Date: 2007, Q2; Brand-name: 109.1; Generic: 92.2. Date: 2007, Q3; Brand-name: 111.1; Generic: 92.8. Date: 2007, Q4; Brand-name: 113.1; Generic: 92.8. Date: 2008, Q1; Brand-name: 118.5; Generic: 93.0. Date: 2008, Q2; Brand-name: 120.3; Generic: 94.0. Date: 2008, Q3; Brand-name: 121.8; Generic: 93.7. Date: 2008, Q4; Brand-name: 124.0; Generic: 91.6. Date: 2009, Q1; Brand-name: 128.6; Generic: 91.4. Date: 2009, Q2; Brand-name: 131.1; Generic: 90.9. Date: 2009, Q3; Brand-name: 133.0; Generic: 91.1. Date: 2009, Q4; Brand-name: 132.7; Generic: 91.4. Date: 20010, Q1; Brand-name: 137.7; Generic: 90.1. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program. Notes: The brand-name drug basket included 35 single-source drugs and 20 drugs that changed from single-source to brand-name multisource during our analysis period. The generic drug basket included 40 generic drugs and 5 brand-name multisource drugs. The index value of 137.7 indicates an increase of 37.7 percent in the average U&C price for the basket of 55 commonly used brand-name drugs during our analysis period, and the index value of 90.1 indicates a decrease of 9.9 percent in the average U&C price for the basket of 45 commonly used generic drugs during our analysis period. [End of figure] Figure 5: Annual Change in the Usual and Customary (U&C) Price Index for a Basket of 100 Commonly Used Prescription Drugs When Shifts in Consumer Utilization Between Brand-name and Generic Versions of the Drugs Were Included, 2006 through the First Quarter of 2010: [Refer to PDF for image: vertical bar graph] Date: 2006 Q1 - 2007 Q1; Percentage change: 1.0%. Date: 2007 Q1 - 2008 Q1; Percentage change: 1.8%. Date: 2008 Q1 - 2009 Q1; Percentage change: 3.4%. Date: 2009 Q1 - 2010 Q1; Percentage change: 4.3%. Date: Average 2006 Q1 - 2010 Q1; Percentage change: 2.6%. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program. [End of figure] Figure 6: Usual and Customary (U&C) Price Index for a Basket of 100 Commonly Used Prescription Drugs When Shifts in Consumer Utilization Between Brand-name and Generic Versions of the Drugs Were Included, 2006 through the First Quarter of 2010: [Refer to PDF for image: line graph] Date: 2006 Q1; Index: 100. Date: 2006 Q2; Index: 101.0. Date: 2006 Q3; Index: 100.3. Date: 2006 Q4; Index: 99.9. Date: 2007 Q1; Index: 100.0. Date: 2007 Q2; Index: 99.8. Date: 2007 Q3; Index: 99.8. Date: 2007 Q4; Index: 100.4. Date: 2008 Q1; Index: 102.8. Date: 2008 Q2; Index: 103.3. Date: 2008 Q3; Index: 103.5. Date: 2008 Q4; Index: 103.9. Date: 2009 Q1; Index: 106.3. Date: 2009 Q2; Index: 107.3. Date: 2009 Q3; Index: 108.9. Date: 2009 Q4; Index: 108.5. Date: 2010 Q1; Index: 110.8. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program. Note: The index value of 110.8 indicates an increase of 10.8 percent in the average U&C price for a basket of 100 commonly used drugs when shifts in consumer utilization between brand-name and generic versions of the drugs were included. [End of figure] Figure 7: Annual Change in the Price Indexes Using Usual and Customary (U&C) and Other Drug Pricing Measures for a Basket of 100 Commonly Used Prescription Drugs, 2006 through the First Quarter of 2010: [Refer to PDF for image: multiple vertical bar graph] Date: 2006 Q1-2007 Q1; U&C: 5.4%; AWP: 4.3%; AMP: 1.9%; Part D: N/A[A]. Date: 2007 Q1-2008 Q1; U&C: 8.1%; AWP: 5.8%; AMP: 9.5%; Part D: 6.8%. Date: 2008 Q1-2009 Q1; U&C: 7%; AWP: 6.5%; AMP: -2.5%; Part D: 5.3%. Date: 2009 Q1-2010 Q1; U&C: 5.9%; AWP: 7.6%; AMP: 12.3%; Part D: 8.4%. Date: Average 2006 Q1-2010 Q1; U&C: 6.6%; AWP: 6%; AMP: 5.3%; Part D: 0%. Date: Average 2007 Q1-2010 Q1; U&C: 0%; AWP: 0%; AMP: 7%; Part D: 6.8%. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program, U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program, AWP from Red Book, and AMP and Medicare Part D prices from CMS. Notes: The AMP price index should be interpreted with caution for several reasons. First, CMS changed the calculation of AMP in accordance with the Deficit Reduction Act of 2005 starting on October 1, 2007 (see footnote 21). In addition, we previously reported significant variations in the monthly AMP data reported to CMS for many drugs (see GAO, 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.: Nov. 30, 2009)). Finally, a 2010 report by the Department of Health and Human Services Office of Inspector General found significant manufacturer noncompliance with the requirements for reporting AMPs to CMS (see Department of Health and Human Services Office of Inspector General, Drug Manufacturers' Noncompliance with Average Manufacturer Price Reporting Requirements, OEI-03-09-00060 (Philadelphia, Pa.: September 2010)). [A] The Part D price index runs from the first quarter of 2007 through the first quarter of 2010. Of the 100 drugs in our basket, 11 did not have Part D pricing data for one or more quarters of our analysis period and thus were removed from the basket when calculating the Part D price indexes. These 11 drugs represented 8.0 percent of the total utilization for the basket. [End of figure] Figure 8: Price Indexes Using Usual and Customary (U&C) and Other Drug Pricing Measures for a Basket of 100 Commonly Used Prescription Drugs, 2006 through the First Quarter of 2010: [Refer to PDF for image: multiple line graph] Date: 2006 Q1; U&C: 100; AWP: 100; AMP: 100; Date: 2006 Q2; U&C: 101.4; AWP: 100.7; AMP: 100.8. Date: 2006 Q3; U&C: 102.5; AWP: 101.0; AMP: 98.0. Date: 2006 Q4; U&C: 102.8; AWP: 101.6; AMP: 97.6. Date: 2007 Q1; U&C: 105.4; AWP: 104.3; AMP: 101.8. Date: 2007 Q2; U&C: 106.1; AWP: 105.0; AMP: 99.5. Date: 2007 Q3; U&C: 107.8; AWP: 106.5; AMP: 97.2. Date: 2007 Q4; U&C: 109.4; AWP: 107.8; AMP: 112.2. Date: 2008 Q1; U&C: 113.9; AWP: 110.3; AMP: 111.5. Date: 2008 Q2; U&C: 115.5; AWP: 111.2; AMP: 102.3. Date: 2008 Q3; U&C: 116.7; AWP: 112.6; AMP: 106.8. Date: 2008 Q4; U&C: 118.2; AWP: 114.1; AMP: 106.8. Date: 2009 Q1; U&C: 121.8; AWP: 117.5; AMP: 108.7. Date: 2009 Q2; U&C: 123.8; AWP: 119.5; AMP: 113.2. Date: 2009 Q3; U&C: 125.5; AWP: 120.8; AMP: 117.3. Date: 2009 Q4; U&C: 125.3; AWP: 121.7; AMP: 118.7. Date: 2010 Q1; U&C: 129.1; AWP: 126.4; AMP: 122.1. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program, U&C prices from Pennsylvania’s Pharmaceutical Assistance Contract for the Elderly program, AWP from Red Book, and AMP from CMS. Note: The AMP price index should be interpreted with caution for several reasons. First, CMS changed the calculation of AMP in accordance with the Deficit Reduction Act of 2005 starting on October 1, 2007 (see footnote 21). In addition, we previously reported significant variations in the monthly AMP data reported to CMS for many drugs (see GAO, 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.: Nov. 30, 2009)). Finally, a 2010 report by the HHS OIG found significant manufacturer noncompliance with the requirements for reporting AMPs to CMS (see Department of Health and Human Services Office of Inspector General, Drug Manufacturers' Noncompliance with Average Manufacturer Price Reporting Requirements, OEI-03-09-00060 (Philadelphia, Pa.: September 2010)). The Part D price index is excluded because Part D data were not available for 2006 or for the fourth quarter of each year. The index value of 129.1 indicates an increase of 29.1 percent in the average U&C price for the basket of 100 commonly used drugs during the period. The index value of 126.4 indicates an increase of 26.4 percent in the average AWP for the basket of 100 commonly used drugs during the period. The index value of 122.1 indicates an increase of 22.1 percent in the average AMP for the basket of 100 commonly used drugs during our analysis period. [End of figure] [End of Enclosure III] Enclosure IV: Percentage Change in Usual and Customary (U&C) Price for 55 Commonly Used Brand-Name Drugs, 2006 through the First Quarter of 2010: Drug name, strength, route of administration, and dosage form: Flomax (0.4mg/oral/capsule); Percentage change in U&C price: 2006 Q1-2007 Q1: 9.8; 2007 Q1-2008 Q1: 15.1; 2008 Q1-2009 Q1: 20.7; 2009 Q1-2010 Q1: 24.9; Average 2006 Q1-2010 Q1: 17.6. Drug name, strength, route of administration, and dosage form: Ambien (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 37.5; 2007 Q1-2008 Q1: 4.2; 2008 Q1-2009 Q1: 11.6; 2009 Q1-2010 Q1: 7.7; Average 2006 Q1-2010 Q1: 15.3. Drug name, strength, route of administration, and dosage form: Clarinex (5mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 20.0; 2007 Q1-2008 Q1: 16.3; 2008 Q1-2009 Q1: 8.9; 2009 Q1-2010 Q1: 4.6; Average 2006 Q1-2010 Q1: 12.5. Drug name, strength, route of administration, and dosage form: Premarin (0.625mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 12.0; 2007 Q1-2008 Q1: 13.2; 2008 Q1-2009 Q1: 11.6; 2009 Q1-2010 Q1: 11.8; Average 2006 Q1-2010 Q1: 12.2. Drug name, strength, route of administration, and dosage form: Altace (5mg/oral/capsule); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.1; 2007 Q1-2008 Q1: 16.7; 2008 Q1-2009 Q1: 13.2; 2009 Q1-2010 Q1: 10.4; Average 2006 Q1-2010 Q1: 11.6. Drug name, strength, route of administration, and dosage form: Altace (10mg/oral/capsule); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.9; 2007 Q1-2008 Q1: 13.7; 2008 Q1-2009 Q1: 14.8; 2009 Q1-2010 Q1: 10.4; Average 2006 Q1-2010 Q1: 11.5. Drug name, strength, route of administration, and dosage form: Effexor- XR (75mg/oral/capsule (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 7.9; 2007 Q1-2008 Q1: 15.3; 2008 Q1-2009 Q1: 6.5; 2009 Q1-2010 Q1: 15.1; Average 2006 Q1-2010 Q1: 11.2. Drug name, strength, route of administration, and dosage form: Lantus (100u/1ml/subcutaneous/solution); Percentage change in U&C price: 2006 Q1-2007 Q1: 12.7; 2007 Q1-2008 Q1: 12.4; 2008 Q1-2009 Q1: 13.7; 2009 Q1-2010 Q1: 5.7; Average 2006 Q1-2010 Q1: 11.1. Drug name, strength, route of administration, and dosage form: Lotrel (5mg-20mg/oral/capsule); Percentage change in U&C price: 2006 Q1-2007 Q1: 9.8; 2007 Q1-2008 Q1: 16.2; 2008 Q1-2009 Q1: 10.2; 2009 Q1-2010 Q1: 8.2; Average 2006 Q1-2010 Q1: 11.1. Drug name, strength, route of administration, and dosage form: Effexor- XR (150mg/oral/capsule (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.9; 2007 Q1-2008 Q1: 14.1; 2008 Q1-2009 Q1: 5.8; 2009 Q1-2010 Q1: 15.1; Average 2006 Q1-2010 Q1: 11.0. Drug name, strength, route of administration, and dosage form: Hyzaar (25mg-100mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 7.3; 2007 Q1-2008 Q1: 11.2; 2008 Q1-2009 Q1: 16.6; 2009 Q1-2010 Q1: 8.5; Average 2006 Q1-2010 Q1: 10.9. Drug name, strength, route of administration, and dosage form: Crestor (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.8; 2007 Q1-2008 Q1: 10.7; 2008 Q1-2009 Q1: 14.8; 2009 Q1-2010 Q1: 12.1; Average 2006 Q1-2010 Q1: 10.9. Drug name, strength, route of administration, and dosage form: Aciphex (20mg/oral/tablet, ente); Percentage change in U&C price: 2006 Q1-2007 Q1: 7.9; 2007 Q1-2008 Q1: 7.6; 2008 Q1-2009 Q1: 14.0; 2009 Q1-2010 Q1: 13.1; Average 2006 Q1-2010 Q1: 10.7. Drug name, strength, route of administration, and dosage form: Xalatan (0.005%/ophthalmic/solution); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.5; 2007 Q1-2008 Q1: 12.4; 2008 Q1-2009 Q1: 14.6; 2009 Q1-2010 Q1: 7.8; Average 2006 Q1-2010 Q1: 10.3. Drug name, strength, route of administration, and dosage form: Aricept (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 7.6; 2007 Q1-2008 Q1: 10.0; 2008 Q1-2009 Q1: 9.6; 2009 Q1-2010 Q1: 13.0; Average 2006 Q1-2010 Q1: 10.1. Drug name, strength, route of administration, and dosage form: Actonel (35mg/oral/tablet); 2006 Q1-2007 Q1: 8.7; 2007 Q1-2008 Q1: 10.3; 2008 Q1-2009 Q1: 11.8; 2009 Q1-2010 Q1: 6.9; Average 2006 Q1-2010 Q1: 9.4. Drug name, strength, route of administration, and dosage form: Diovan (160mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 7.5; 2007 Q1-2008 Q1: 10.5; 2008 Q1-2009 Q1: 10.6; 2009 Q1-2010 Q1: 8.0; Average 2006 Q1-2010 Q1: 9.2. Drug name, strength, route of administration, and dosage form: Zoloft (50mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.2; 2007 Q1-2008 Q1: 19.9; 2008 Q1-2009 Q1: 8.0; 2009 Q1-2010 Q1: -0.2; Average 2006 Q1-2010 Q1: 9.0. Drug name, strength, route of administration, and dosage form: Avandia (4mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 11.5; 2007 Q1-2008 Q1: 3.1; 2008 Q1-2009 Q1: 7.6; 2009 Q1-2010 Q1: 13.4; Average 2006 Q1-2010 Q1: 8.9. Drug name, strength, route of administration, and dosage form: Diovan (80mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.6; 2007 Q1-2008 Q1: 10.6; 2008 Q1-2009 Q1: 8.8; 2009 Q1-2010 Q1: 9.5; Average 2006 Q1-2010 Q1: 8.9. Drug name, strength, route of administration, and dosage form: Vytorin (10mg-40mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 11.3; 2007 Q1-2008 Q1: 7.8; 2008 Q1-2009 Q1: 7.5; 2009 Q1-2010 Q1: 8.5; Average 2006 Q1-2010 Q1: 8.8. Drug name, strength, route of administration, and dosage form: Diovan HCT (12.5mg-160mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.6; 2007 Q1-2008 Q1: 8.6; 2008 Q1-2009 Q1: 11.8; 2009 Q1-2010 Q1: 7.6; Average 2006 Q1-2010 Q1: 8.7. Drug name, strength, route of administration, and dosage form: Zetia (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.7; 2007 Q1-2008 Q1: 13.5; 2008 Q1-2009 Q1: 9.0; 2009 Q1-2010 Q1: 5.2; Average 2006 Q1-2010 Q1: 8.6. Drug name, strength, route of administration, and dosage form: Vytorin (10mg-20mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 12.4; 2007 Q1-2008 Q1: 6.2; 2008 Q1-2009 Q1: 7.1; 2009 Q1-2010 Q1: 8.7; Average 2006 Q1-2010 Q1: 8.6. Drug name, strength, route of administration, and dosage form: Norvasc (5mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.5; 2007 Q1-2008 Q1: 15.6; 2008 Q1-2009 Q1: 6.7; 2009 Q1-2010 Q1: 3.4; Average 2006 Q1-2010 Q1: 8.6. Drug name, strength, route of administration, and dosage form: Mobic (7.5mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.3; 2007 Q1-2008 Q1: 9.6; 2008 Q1-2009 Q1: 14.2; 2009 Q1-2010 Q1: 4.8; Average 2006 Q1-2010 Q1: 8.5. Drug name, strength, route of administration, and dosage form: Norvasc (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.2; 2007 Q1-2008 Q1: 15.1; 2008 Q1-2009 Q1: 7.2; 2009 Q1-2010 Q1: 3.0; Average 2006 Q1-2010 Q1: 8.4. Drug name, strength, route of administration, and dosage form: Advair Diskus 250/50 (0.25mg-0.05m/inhalation/disk); Percentage change in U&C price: 2006 Q1-2007 Q1: 12.6; 2007 Q1-2008 Q1: 7.3; 2008 Q1-2009 Q1: 6.5; 2009 Q1-2010 Q1: 6.7; Average 2006 Q1-2010 Q1: 8.3. Drug name, strength, route of administration, and dosage form: Toprol XL (25mg/oral/tablet (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 1.9; 2007 Q1-2008 Q1: 13.1; 2008 Q1-2009 Q1: 13.1; 2009 Q1-2010 Q1: 3.9; Average 2006 Q1-2010 Q1: 8.0. Drug name, strength, route of administration, and dosage form: Cozaar (50mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.3; 2007 Q1-2008 Q1: 6.2; 2008 Q1-2009 Q1: 10.9; 2009 Q1-2010 Q1: 8.6; Average 2006 Q1-2010 Q1: 8.0. Drug name, strength, route of administration, and dosage form: Celebrex (200mg/oral/capsule); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.3; 2007 Q1-2008 Q1: 16.9; 2008 Q1-2009 Q1: 5.4; 2009 Q1-2010 Q1: 3.1; Average 2006 Q1-2010 Q1: 7.9. Drug name, strength, route of administration, and dosage form: Protonix (40mg/oral/tablet, ente); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.5; 2007 Q1-2008 Q1: 5.0; 2008 Q1-2009 Q1: 6.5; 2009 Q1-2010 Q1: 11.4; Average 2006 Q1-2010 Q1: 7.9. Drug name, strength, route of administration, and dosage form: Toprol XL (50mg/oral/tablet (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.4; 2007 Q1-2008 Q1: 7.8; 2008 Q1-2009 Q1: 11.9; 2009 Q1-2010 Q1: 6.2; Average 2006 Q1-2010 Q1: 7.8. Drug name, strength, route of administration, and dosage form: Lexapro (20mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 9.4; 2007 Q1-2008 Q1: 8.9; 2008 Q1-2009 Q1: 7.8; 2009 Q1-2010 Q1: 5.2; Average 2006 Q1-2010 Q1: 7.8. Drug name, strength, route of administration, and dosage form: Lexapro (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 9.2; 2007 Q1-2008 Q1: 8.6; 2008 Q1-2009 Q1: 8.7; 2009 Q1-2010 Q1: 4.7; Average 2006 Q1-2010 Q1: 7.8. Drug name, strength, route of administration, and dosage form: Detrol LA (4mg/oral/capsule (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.2; 2007 Q1-2008 Q1: 14.5; 2008 Q1-2009 Q1: 7.0; 2009 Q1-2010 Q1: 3.4; Average 2006 Q1-2010 Q1: 7.8. Drug name, strength, route of administration, and dosage form: Nasonex (0.05mg/actua/nasal/spray); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.9; 2007 Q1-2008 Q1: 5.5; 2008 Q1-2009 Q1: 10.8; 2009 Q1-2010 Q1: 5.9; Average 2006 Q1-2010 Q1: 7.8. Drug name, strength, route of administration, and dosage form: Toprol XL (100mg/oral/tablet (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.7; 2007 Q1-2008 Q1: 7.8; 2008 Q1-2009 Q1: 11.8; 2009 Q1-2010 Q1: 5.7; Average 2006 Q1-2010 Q1: 7.8. Drug name, strength, route of administration, and dosage form: Singulair (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.6; 2007 Q1-2008 Q1: 7.8; 2008 Q1-2009 Q1: 9.0; 2009 Q1-2010 Q1: 7.2; Average 2006 Q1-2010 Q1: 7.7. Drug name, strength, route of administration, and dosage form: Zoloft (100mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.8; 2007 Q1-2008 Q1: 18.8; 2008 Q1-2009 Q1: 10.9; 2009 Q1-2010 Q1: -5.5; Average 2006 Q1-2010 Q1: 7.5. Drug name, strength, route of administration, and dosage form: Nexium (40mg/oral/capsule (DR)); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.7; 2007 Q1-2008 Q1: 9.5; 2008 Q1-2009 Q1: 7.9; 2009 Q1-2010 Q1: 6.3; Average 2006 Q1-2010 Q1: 7.4. Drug name, strength, route of administration, and dosage form: Plavix (75mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 2.9; 2007 Q1-2008 Q1: 5.2; 2008 Q1-2009 Q1: 7.9; 2009 Q1-2010 Q1: 12.3; Average 2006 Q1-2010 Q1: 7.1. Drug name, strength, route of administration, and dosage form: Niaspan (500mg/oral/tablet (ER)); Percentage change in U&C price: 2006 Q1-2007 Q1: 10.1; 2007 Q1-2008 Q1: 6.0; 2008 Q1-2009 Q1: 6.6; 2009 Q1-2010 Q1: 4.7; Average 2006 Q1-2010 Q1: 6.9. Drug name, strength, route of administration, and dosage form: Lumigan (0.03%/ophthalmic/solution); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.7; 2007 Q1-2008 Q1: 9.0; 2008 Q1-2009 Q1: 7.6; 2009 Q1-2010 Q1: 2.4; Average 2006 Q1-2010 Q1: 6.4. Drug name, strength, route of administration, and dosage form: Evista (60mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.3; 2007 Q1-2008 Q1: 7.7; 2008 Q1-2009 Q1: 4.4; 2009 Q1-2010 Q1: 7.2; Average 2006 Q1-2010 Q1: 6.4. Drug name, strength, route of administration, and dosage form: Pravachol (40mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 2.1; 2007 Q1-2008 Q1: 17.7; 2008 Q1-2009 Q1: 5.3; 2009 Q1-2010 Q1: 0.3; Average 2006 Q1-2010 Q1: 6.4. Drug name, strength, route of administration, and dosage form: Tricor (145mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 5.1; 2007 Q1-2008 Q1: 5.6; 2008 Q1-2009 Q1: 9.0; 2009 Q1-2010 Q1: 5.6; Average 2006 Q1-2010 Q1: 6.3. Drug name, strength, route of administration, and dosage form: Prevacid (30mg/oral/capsule (DR)); Percentage change in U&C price: 2006 Q1-2007 Q1: 8.2; 2007 Q1-2008 Q1: 9.0; 2008 Q1-2009 Q1: 4.1; 2009 Q1-2010 Q1: 3.5; Average 2006 Q1-2010 Q1: 6.2. Drug name, strength, route of administration, and dosage form: Lipitor (10mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.9; 2007 Q1-2008 Q1: 5.9; 2008 Q1-2009 Q1: 6.7; 2009 Q1-2010 Q1: 5.0; Average 2006 Q1-2010 Q1: 6.1. Drug name, strength, route of administration, and dosage form: Lipitor (40mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.8; 2007 Q1-2008 Q1: 5.9; 2008 Q1-2009 Q1: 6.5; 2009 Q1-2010 Q1: 4.4; Average 2006 Q1-2010 Q1: 5.9. Drug name, strength, route of administration, and dosage form: Lipitor (20mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.5; 2007 Q1-2008 Q1: 6.5; 2008 Q1-2009 Q1: 6.0; 2009 Q1-2010 Q1: 4.2; Average 2006 Q1-2010 Q1: 5.8. Drug name, strength, route of administration, and dosage form: Flonase (0.05mg/actua/nasal/spray); Percentage change in U&C price: 2006 Q1-2007 Q1: 10.2; 2007 Q1-2008 Q1: 5.4; 2008 Q1-2009 Q1: 1.6; 2009 Q1-2010 Q1: 3.2; Average 2006 Q1-2010 Q1: 5.1. Drug name, strength, route of administration, and dosage form: Fosamax (70mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 6.5; 2007 Q1-2008 Q1: 6.6; 2008 Q1-2009 Q1: 2.2; 2009 Q1-2010 Q1: 3.1; Average 2006 Q1-2010 Q1: 4.6. Drug name, strength, route of administration, and dosage form: Zocor (20mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 2.5; 2007 Q1-2008 Q1: 4.3; 2008 Q1-2009 Q1: 3.7; 2009 Q1-2010 Q1: 5.6; Average 2006 Q1-2010 Q1: 4.0. Drug name, strength, route of administration, and dosage form: Zocor (40mg/oral/tablet); Percentage change in U&C price: 2006 Q1-2007 Q1: 3.7; 2007 Q1-2008 Q1: 1.0; 2008 Q1-2009 Q1: -1.4; 2009 Q1-2010 Q1: 5.5; Average 2006 Q1-2010 Q1: 2.2. Source: GAO analysis of utilization data from the Blue Cross Blue Shield Federal Employee Program and U&C prices from Pennsylvania's Pharmaceutical Assistance Contract for the Elderly program. [End of table] [End of Enclosure IV] Enclosure V: GAO Contact and Staff Acknowledgments: GAO Contact: John E. Dicken, (202) 512-7114 or dickenj@gao.gov: Staff Acknowledgments: In addition to the contact named above, key contributors to this report were Randy DiRosa, Assistant Director; Krister Friday; Karen Howard; Julian Klazkin; Dan Ries; and Carla Willis. [End of Enclosure V] Footnotes: [1] NHE Web Tables, National Health Expenditures data for 2009 (the most recent available at the time of our analysis), [hyperlink, http://www.cms.gov/nationalhealthexpenddata/02_nationalhealthaccountshis torical.asp] (accessed Jan. 20, 2011). [2] The U&C price is the price an individual without prescription drug coverage would pay at a retail pharmacy. [3] See GAO, Prescription Drugs: Trends in Usual and Customary Prices for Drugs Frequently Used by Medicare and Non-Medicare Health Insurance Enrollees, [hyperlink, http://www.gao.gov/products/GAO-07-1201R] (Washington, D.C.: Sept. 7, 2007). For additional GAO reports on drug pricing, see Prescription Drugs: Trends in Usual and Customary Prices for Drugs Frequently Used by Medicare and Non-Medicare Enrollees, [hyperlink, http://www.gao.gov/products/GAO-05-104R] (Washington, D.C.: Oct. 6, 2004) and Prescription Drugs: Price Trends for Frequently Used Brand and Generic Drugs from 2000 through 2004, [hyperlink, http://www.gao.gov/products/GAO-05-779] (Washington, D.C.: Aug. 15, 2005). [4] See Duff Wilson, "Drug Makers Raise Prices in Face of Health Care Reform," The New York Times, Nov. 16, 2009 and Emily Brandon, "Drug Prices Outpace Inflation," US News, Nov.17, 2009. [5] Pub. L. No. 111-148, 124 Stat. 119 (2010). [6] In selecting our four baskets of drugs, we excluded drugs with fewer than 10 claims in Pennsylvania's Pharmaceutical Assistance Contract for the Elderly program and drugs with zero BCBS FEP claims in one or more of the quarters to assure the drugs were commonly used and continuously marketed throughout our analysis period. [7] For example, all claims for "Zocor/10mg/oral/tablet" were combined as one drug. Using this approach, the brand-name and generic versions of a drug were aggregated separately. For example, "Zocor/10mg/oral/ tablet" and "simvastatin/10mg/oral/tablet" would be considered different drugs for purposes of our first basket because they have different names, even though they are the brand-name and generic versions of drugs containing the same active ingredient. [8] Five of these drugs were brand-name multisource drugs that had generic equivalents available from multiple manufacturers and were marketed under their brand name during our entire analysis period. These 5 brand-name multisource drugs experienced price changes most similar to the 40 generic drugs in our sample and were therefore included in our third basket of generic drugs. [9] For example, all claims with "simvastatin" as the active ingredient and "10mg/oral/tablet" as the strength, route, and dosage form were combined as one drug. Using this approach, the brand-name and generic versions of a drug were combined as one drug. For example, "Zocor/10mg/oral/tablet" and "simvastatin/10mg/oral/tablet" would be considered the same drug for purposes of this fourth basket because they are the brand-name and generic versions of the same drug, even though they have different names. [10] We compared our price indexes to both the medical CPI and the CPI- U because the CPI-U, which describes price changes across a wide range of consumer goods and services, may not appropriately reflect price changes that occur within the health care industry--particularly during the recent economic downturn--and therefore may not provide appropriate context for increases in drug prices. Prescription drugs account for about 18.8 percent of the medical CPI and about 1.2 percent of the CPI-U. [11] The Part D price index runs from the first quarter of 2007 through the first quarter of 2010. We used the first quarter of 2007 as the baseline when calculating the Part D price index because reliable Part D data for 2006 were not available; fourth quarter data for each year were also not available. In addition, 11 of the 100 drugs in our first basket did not have Part D pricing data for one or more quarters of our analysis period and therefore were removed from the basket when calculating the Part D price indexes. These 11 drugs represented 8.0 percent of the total utilization of the basket. [12] Red Book is a drug pricing compendium with information about prices and other characteristics of drug products, published by Thomson Reuters. [13] The broader CPI-U increased at an average annual rate of 2.2 percent from 2006 through the first quarter of 2010. [14] For all drugs selected for our baskets, we obtained corresponding 11-digit national drug codes (NDCs) from Red Book. NDCs are three- segment numbers that are the universal product identifiers for drugs for human use. The Food and Drug Administration assigns the first segment of the NDC, which identifies the firm that manufactures, repackages, or distributes a drug. The second segment identifies a specific strength, dosage form, and formulation for a particular firm. The third segment identifies the package size and type. A drug can have multiple NDCs associated with it. For example, a drug made by one manufacturer, in one strength or dosage form, but in three package sizes would have three NDCs. [15] In selecting our four baskets, we excluded any drug that had zero BCBS FEP claims in one or more quarters of our analysis period--first quarter 2006 through first quarter 2010--and any drugs that had fewer than 10 claims in Pennsylvania's Pharmaceutical Assistance Contract for the Elderly program in one or more of the quarters to assure the drugs were commonly used and continuously marketed throughout our analysis period. [16] Red Book is a drug pricing compendium with information about prices and other characteristics of drug products, published by Thomson Reuters. [17] Single-source drugs include those brand-name drugs that have no generic equivalent on the market and are generally available from only one manufacturer. Brand-name multisource drugs include those brand- name drugs that have generic equivalents available from multiple manufacturers and are marketed under their brand names. [18] Generic drugs include multisource drugs that have the same active ingredient as their branded counterparts and are generally marketed by multiple manufacturers under a nonproprietary name. [19] We removed PACE claims for which the U&C drug price fell outside two standard deviations from the mean price per 30-day supply for each quarter. [20] We compared our price indexes to both the medical CPI and the CPI- U because the CPI-U, which describes price changes across a wide range of consumer goods and services, may not appropriately reflect price changes that occur within the health care industry--particularly during the recent economic downturn--and therefore may not provide appropriate context for increases in drug prices. Prescription drugs are responsible for about 18.8 percent of the medical CPI and about 1.2 percent of the CPI-U. [21] The Medicare Prescription Drug Plan Finder data were provided by a CMS contractor as average, utilization-weighted negotiated prices across all plans for each drug under Medicare Part D as reported to CMS by Part D plan sponsors. The data did not include non-Part D plans; national Program of All-Inclusive Care for the Elderly plans; employer sponsored plans; demonstration plans; or plans whose pharmacy data were suppressed in the Public Use File reporting period because of plan request, data inaccuracy, or other issues identified by CMS. The contractor considered the 2006 data unreliable and was not able to provide pricing data for the fourth quarter of any year in our analysis period because of the way those data are reported. Medicare Part D Plan Finder data are based on proxy NDCs and do not include data for all NDCs. A unique proxy NDC is assigned by CMS to each drug at the brand name, generic name, dosage form, and strength level. CMS recommends that this same proxy NDC be used for all therapeutically equivalent versions of a drug. Therefore, we applied the prices for proxy NDCs to all NDCs associated with the same name, strength, and dosage form when calculating the Part D price indexes. [22] The AMP definition was amended again with the enactment of PPACA. We did not factor this change into our analysis because the analysis included data only through the end of the first quarter of 2010, prior to the effective date of the pertinent changes made by PPACA. See Pub. L. No. 111-148, § 2503(a)(2), d, 124 Stat. 119, 310-12 (2010), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA), Pub. L. No. 111-152, § 1101(c), 124 Stat. 1029, 1039 and Pub. L. No. 111-226, § 202, 124 Stat. 2389, 2394 (2010); Pub. L. No. 109- 171, § 6001(c), 120 Stat. 4, 54-6 (2006); 72 Fed. Reg. 39142 (July 17, 2007). [23] See GAO, Medicaid Outpatient Prescription Drugs: Second Quarter 2008 Federal Upper Limits for Reimbursement Compared with Average Retail Pharmacy Acquisition Costs, [hyperlink, http://www.gao.gov/products/GAO-10-118R] (Washington, D.C.: Nov. 30, 2009). [24] See Department of Health and Human Services Office of Inspector General, Drug Manufacturers' Noncompliance with Average Manufacturer Price Reporting Requirements, OEI-03-09-00060 (Philadelphia, Pa.: September 2010). [End of section] GAO's Mission: The Government Accountability Office, the audit, evaluation and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO's commitment to good government is reflected in its core values of accountability, integrity, and reliability. 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