AARP: Cost of Top Drugs Rose Twice Inflation Rate

Indianapolis Star 16aug2005

The New York Times — For the third consecutive year, the average prices of dozens of brand-name prescription drugs widely used by elderly Americans have risen more than twice as fast as general inflation, according to a survey to be released today by the advocacy group AARP.

The 12-month average increase for 195 drugs was 6.6 percent, or more than double the 3.1 percent rise in the Consumer Price Index that tracks general inflation.

Also in line with the trend in recent years, there was little inflation -- less than 1 percent -- in the average price of generic drugs, AARP said.

Stephen W. Schondelmeyer, a University of Minnesota drug-price specialist who analyzed wholesale drug prices for the AARP survey, said the increases underscored the big burden the federal government will be taking on in January, when Medicare benefits will be expanded to include prescription drugs.

Ken Johnson, a spokesman for the drug industry, criticized the AARP numbers, saying they were based on wholesale prices and "do not reflect the true amounts paid by seniors for their medicines." Johnson is a senior vice president of the Pharmaceutical Research and Manufacturers Association.

Ann Smith, a spokeswoman for Medco Health Solutions, a large pharmaceutical managed-care company that negotiates rebates and discounts on behalf of drug plans, said the 6.6 percent wholesale price increases are "generally what we are also seeing."

source: http://www.indystar.com/apps/pbcs.dll/article?AID=/20050816/BUSINESS/508160383/1003 16aug2005

AARP: Wholesale Drug Prices Top Inflation in General

RANDOLPH E. SCHMID / AP 16aug2005

WASHINGTON - Wholesale prices for the brand-name prescription drugs widely used by older Americans rose at more than twice the rate of inflation during the year that ended March 31, the AARP says.

The price charged by manufacturers climbed 6.6 percent for a sample of 195 drugs. That's down from the 7.1 percent increase in the year that ended Dec. 31 but still well ahead of the 3 percent general inflation rate, the organization said in a report for release Tuesday.

"We are very disappointed that brand name manufacturers have failed to keep their price increases in line with inflation and we will continue to educate our members and the public about how best to find the most affordable prescription drugs to suit their needs," AARP chief executive William Novelli said.

The Pharmaceutical Research and Manufacturers of America accused AARP of using "fuzzy math."

Prescription drug prices have risen less than overall medical costs, the trade group said. And, PhRMA vice president Ken Johnson added, starting next January seniors will get savings on medicines by enrolling in Medicare's new prescription program.

The study by AARP's Public Policy Institute and the University of Minnesota found price increases for 110 brand-name drugs sampled.

For a typical older person taking three prescription drugs daily, the increase for the year ended March 31 translates to an extra $144.15 cost per year, if they use brand name products and the full price increase is passed along to the consumer, according to AARP,

Looking at the first three months of this year, the study found the biggest price increase, 6.1 percent, was for insulin sensitizing drugs for diabetics. Tied for second with 5.9 percent increases were two types of blood pressure drugs, angiotensin II receptor antagonists and calcium channel blockers.

The single largest increase was 9.5 percent for Combivent, an aerosol drug that improves breathing by helping open bronchial tubes.

The researchers also looked at generic prescription drugs. Overall costs were up 0.7 percent in a check of 75 drugs for the year ended March 31. Only three of the drugs had an increase in the first three months of this year, the report said.

Drug Study Sees Savings in Generics

LAWRENCE M. O'ROURKE / Sacramento Bee 16aug2005

WASHINGTON - The cost of generic drugs most often used by older Americans in the United States appears to be stabilizing while prices of brand-name drugs, especially those heavily advertised, are shooting up, according to a study being released today. The study found that brand-name drugs have increased in price, over the past year, at about nine times the rate of generic drugs.

"The study shows that generics are a better deal ..." said John Rother, policy director at the AARP, the study's sponsor.

Rother said the study also showed that generic drug prices may be held down by competition while brand-name drugs often have the market to themselves. He said some of the sharpest rises in brand-name prices were for drugs heavily advertised on television.

The drug industry's trade group responded that drug price increases have been lower than the inflation rate in overall medical care.

The study, conducted by the University of Minnesota's Prime Institute, pointed out that the manufacturer list prices of 75 generic drugs, most widely used by Americans age 50 and older, rose seven-tenths of 1 percent in the year that ended March 31.

By contrast, manufacturer prices for brand-name drugs rose 6.6 percent in the same 12 months, AARP said.

Generic versions of a drug can be sold once a patent expires. Until then, drug makers are allowed exclusive rights to the medication to recoup their research costs.

source: http://www.sacbee.com/content/business/story/13422793p-14264092c.html 16aug2005