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Brand Drug Prices Continue to Climb Twice as Fast as Inflation

Generic drugs go unchanged for second quarter 2005

Nov. 2, 2005 – The latest update on drug prices by AARP’s Public Policy Institute found prices for nearly 200 of the most commonly used brand name medications rose 6.1 percent during the 12 month period from July 2004–June 2005. At the same time, the rate of general inflation was 3 percent.

One silver lining for senior consumers is that manufacturers of 75 widely used generic drugs continue to hold the line. Manufacturer prices for all of these products were unchanged during the second quarter of 2005.

The sharpest price increases were for the drug Atrovent 18 mg/act, which rose at 18.6 percent, and Ambien 5 mg which climbed 14.4 percent for the first six months of 2005. Among the best sellers, Proctor and Gamble's Actonel 35 mg rose 7.5 percent, Lilly's Evista 60 mg jumped 6.2 percent and AstraZeneca' s Toprol XL 50 mg increased 6 percent.

AARP CEO Bill Novelli said, "State, federal and family health care budgets are being stretched to the max, and sadly sometimes beyond. It is simply unsustainable for American consumers to continue footing the bill for endless increases in drug prices."

He added, "Consumers will be facing higher gas and energy costs this winter. With less disposable income, drug price increases will certainly have a chilling effect on the health and well being of millions struggling to afford the drug treatments they need."

AARP has declared November 2nd as "National Rx Watchdog Day."

The organizations says that throughout the week, 50 AARP state offices are coordinating efforts to bring down the high cost of prescription drugs. Through ballot initiatives, new legislation, consumer education, advertising, litigation and other activities, the battle against high drug costs is being waged state-by-state, coast-to-coast.

AARP “drug price-busting” efforts center on various areas that will lead to increased access and affordability. They include, but are not limited to:

  ● Promotion of "evidence-based research," the use of generics when appropriate and the wise use of medications;

  ● Market fairness including the public posting of drug prices, stricter regulation of direct-to-consumer advertising and physician detailing, and greater transparency of pharmacy benefits managers;

  ● Bulk purchasing;

  ● Preferred drug lists and prior authorization for state drug purchasing programs;

  ● Authority for Medicare to negotiate lower drug prices;

  ● Safe and legal importation of drugs from Canada and other nations.

A California ballot initiative sponsored by the pharmaceutical industry that will create voluntary pharmaceutical discounts creates only an "empty promise" for consumers. AARP is traveling up and down the state to oppose Proposition 78.

"Californians deserve something better than Prop 78. This measure simply is not in the best interest of our members and other Californians who deserve meaningful discounts. Proposition 78 does not ensure real help with rising drug costs." Helen Russ, AARP California State President.

In Michigan, one state where both consumers and businesses are grappling with unaffordable drug price increases, AARP is helping introduce legislation that will curb physician detailing, increase accountability of pharmacy benefits managers and require the public posting of prices.

"Prescription drug costs are eating us alive," said AARP Michigan State Director Steve Gools. "A just-released poll of voters conducted for AARP Michigan shows that 89 percent consider drug affordability to be a top or important priority. AARP's Rx Watchdog Report shines a spotlight on high drug costs, and we similarly support legislation in our state to help consumers get better, more transparent cost information."

New York's public posting of prices has enabled consumers to more easily shop around to find the lowest prices. AARP volunteers were instrumental in working with Attorney General Elliot Spitzer to create the state Watchdog program which has now evolved into the mandatory posting of retail prices.

Many states already have programs in place that help those in need. AARP is urging state lawmakers to use the money they will save with the new Medicare drug program to expand and preserve state prescription drug assistance. AARP Alaska State Director Edgar Rivas explains, "The Governor and the Legislature successfully expanded Alaska's SeniorCare Program to help older Alaskans. AARP is also encouraging the Legislature to restore both SeniorCare and Denali KidCare eligibility to those with modest incomes."

Connecticut's CONNPace program has helped many in the state afford the medications their doctors prescribe. AARP is running ads and an 800 number for residents to call their legislators and ask them to hold a special session to create an effective "wrap-around" of the Medicare benefit. With the federal government now helping many in the CONNPace program, AARP wants the state to use the money it saves to restore recent cuts to the states CONNPace and Medicaid prescription drug programs.

AARP in Montana successfully sought legislation that will significantly lower drug costs for 20 percent of that state - an estimated 188,000 poor, elderly, and disabled. This includes a new prescription assistance program for low income Medicare beneficiaries and a drug discount program for those with limited incomes and no drug insurance.

To help consumers help themselves, many states are using comparative drug research. Often the most expensive drug isn't always more effective. Giving consumers information about the comparative effectiveness of medications is helping people learn more about lower cost treatments. AARP Kansas is distributing a video with the governor, a physician/state senator and a pharmacist. The video directs consumers to the AARP website and other places they can go to compare the effectiveness of medications. By using this information, consumers like Kay Shields, a retired manager of the Parsons, Kansas Credit Union, saved over $1,000 last year alone.

In every state, AARP says it has been busy helping provide information to its members about the new drug coverage in Medicare.

Novelli added, "Regardless of where you live, or what medications you take, there are Medicare plan offerings that can significantly lower the cost of drugs for those in the program. We are encouraging our members to learn more about the Medicare drug plans and find out which one may be right for you."

AARP also says it has battled the high prices of prescription drugs through legal action. Some states have made attempts to contain rising costs of prescription drugs in their Medicaid programs by establishing prior authorization programs combined with preferred drug lists. AARP supported both Michigan and Maine against challenges to these programs by the pharmaceutical industry.

AARP also is supporting Maine and the District of Columbia in cases brought against them by the Pharmaceutical Care Management Association (PCMA), the trade association that represents pharmacy benefit managers (PBMs). Maine and DC passed laws requiring that the PBMs disclose the full amount of negotiated rebates so they can be passed along eventually to consumers. PCMA sued to block implementation of the laws. Appeals are pending.

The drug price study was conducted by AARP's Public Policy Institute in conjunction with the PRIME Institute at the University of Minnesota,

For more on the drug report – click here.

AARP is a nonprofit, nonpartisan membership organization that says it helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole.

AARP’s website is www.aarp.org.

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