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Of more than 4,300 instances in which pharmacies saw generic drug prices rise by 50% or more over a recent two-year period, the reimbursement from health plans and pharmacy benefit kept up with the price increases only 16% of the time, according to a new analysis.

The findings underscore the fact that pharmacies are sometimes getting squeezed when their costs increase, which has contributed to an ongoing number of closures among retail pharmacies around the U.S. in recent years. Moreover, the numbers also suggest that consumers are more likely to find that a needed medicine, especially those where demand is rising, is no longer available.


“If the pharmacies can’t recoup their operating costs, or if they are paid below their acquisition costs for the drug, it decreases the likelihood that pharmacies will dispense the drug or even buy it in the first place,” explained Antonio Ciaccia, a cofounder of 3 Axis Advisors, a market research firm that tracks prescription drug pricing through pharmacies and pharmacy benefit managers.

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