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Brand-Name Drug Prices Out-Strip Inflation Again in
2005
Sixth year in a
row for brand-names to beat inflation; generics cut prices
 April
10, 2006 – The brand-name prescription drugs most widely used by
America's senior citizens increased prices higher than the general rate
of inflation in 2005 – for the sixth year in a row. The latest results
of the survey by AARP's "Rx Watchdog" were released today and show the
average price increase of 193 brand-name drugs was 6 percent last year,
when inflation was just 3.4 percent. Generic drugs actually experienced
a price decrease.
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To help consumers better understand drug pricing
and to add pressure on the industry to make drugs more affordable, AARP
says its "Rx Watchdog" project monitors changes in manufacturers’ drug
prices and issues quarterly reports on the results of analysis by the
AARP Public Policy Institute.
In response to the 2005 price increases AARP
Director of Policy and Strategy John Rother said, "Prices for brand name
drugs have jumped 40 percent on average over the past six years,
compared to inflation of only 17 percent. Since these price increases
charged to wholesalers are generally passed on in the prices consumers
ultimately pay, brand name drugs have become substantially less
affordable for consumers at the same time they are becoming ever more
essential to good medical care."
"These prices are reflected both in higher premiums
for drug coverage as well as in higher out of pocket costs at the
pharmacy counter," he added.
"Drug affordability continues to be a major
challenge and AARP is fighting high drug costs on many fronts. Greater
transparency like the publishing of drug prices helps put some pressure
on the industry, but much more needs to be done," Rother said.
AARP says it strongly supports the safe and legal
importation of prescription drugs as one way to help consumers lower
their costs. Among other measures, AARP also promotes the wise use of
medications and the greater use of generics when appropriate.
While brand name prices continue their upward
spiral, the price study found that, on average, generics continue to
hold the line on price increases. AARP is "strongly" urging the FDA and
Congress to add staff for quicker approval of generic drugs so they are
available to consumers much sooner.
Manufacturer list prices for the sample of 75 generic drugs in the AARP
study fell by 0.8 percent in 2005, when measured as a 12-month rolling
average and weighted by actual 2003 sales to Americans age 50 and over.
Of the 193 brand-name drugs in the 2005 sample, 187
are used in the treatment of chronic conditions that affect millions of
older Americans—arthritis pain, osteoporosis, cardio-vascular disease,
high blood pressure, gastrointestinal conditions and sleeplessness,
among others. Assuming that drug makers’ entire increases were passed on
to the payer, the average annual cost of therapy per prescription was
$47 more in 2005 than in 2004.
Over the six years that AARP "Rx Watchdog" has
monitored the industry’s pricing habits, the average annual cost of
therapy with brand-name products used to treat chronic conditions
increased $297. However, the typical older individual in America
regularly takes four drugs so, assuming these are brand-name products,
their annual cost of therapy rose almost $1,200 from the end of 1999 to
the end of 2005.
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Average
Annual Percentage Change in Manufacturer Prices for Most Widely
Used Brand Name Prescription Drugs, 2000 through 2005 |
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Average increases for 2004 and
2005 exclude Vioxx 12.5 mg and 25 mg tablets, which were
withdrawn from the market in September 2004. Average increase
for 2005 also excludes Bextra 10 mg and 20 mg tablets, which
were withdrawn from the market in April 2005.
Prepared by the AARP Public
Policy Institute and the PRIME Institute, University of
Minnesota, based on data from Medi-Span Price-Chek PC
(Indianapolis, IN: Wolters Kluwer Health Inc., February 2006). |
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Of the 24 most widely used brand-name drugs in the
sample:
● The highest price increase, 11.1 percent, was
applied to Toprol XL 50 mg tablets, a cardio-selective beta blocker
manufactured by AstraZeneca.
● The lowest increase among these best sellers,
2.9 percent, was applied to Plavix 75 mg tablets, an antiplatelet
medication made by Bristol-Myers Squibb.
Although prices continue to soar the report found a
slight silver lining. The average annual brand-name drug increase in
2005 was substantially lower than the rates of increase in 2003 and
2004, and slightly lower than that of 2002.
AARP says it is a nonprofit, nonpartisan membership
organization that helps people 50+ have independence, choice and control
in ways that are beneficial and affordable to them and society as a
whole. AARP Foundation is an affiliated charity that provides security,
protection, and empowerment to older persons in need with support from
thousands of volunteers, donors, and sponsors.
★
Link to the pdf version of the brand-name drug report –
Click Here.
★ Link to the pdf
version of the generic drug report –
Click Here
★ The full AARP
Public Policy Institute reports are available online -
Click Here.
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