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Prescription Drug Price Increases Continue to
Outpace Inflation: AARP Study
Dec. 6, 2004 - A new report released today by AARP
found the annual rate of manufacturers' price increases for the 197
brand name prescription drugs most commonly used by older Americans more
than tripled the rate of inflation over the 12 month period ending on
September 30, 2004.
Drug manufacturers' prices increased 7.4 percent,
on average, from September 2003 to September 2004. The rate of general
inflation during that same 12-month time period was 2.3 percent. The
information is part of an ongoing series by AARP - Trends in
Manufacturers Prices for Brand Name Drugs Most Commonly Used by Older
AmericansSecond and Third Quarter 2004 Update.
"While millions of Americans struggle to afford the
medications they need, it is very disturbing for prices to increase at
such a high rate," said AARP CEO Bill Novelli.
"Prescription drug affordability is an enormous
challenge not only for our members, but to employers, insurers, state
drug assistance programs, Medicaid budgets, 44 million uninsured and
millions more who lack adequate drug coverage," Novelli said.
Earlier this year, AARP asked drug manufacturers to
hold back price increases to the rate of inflation or less. But the
latest AARP report finds very few are doing their part.
More than 80 percent of the drugs in the AARP
sample161 of 197had increases in manufacturers' prices during the
period from December 31, 2003 through September 30, 2004. Nearly all of
these increases exceeded the rate of inflation during the same
nine-month period.
According to report co-author David Gross of AARP's
Public Policy Institute, "The good news is that the average manufacturer
price increase through the first nine months of the year5 percentis
the lowest rate since 2001." This lower rate is partially attributable
to an average price increase of only five percent for the three-months
between July and September 2004. While these months correspond to the
introduction of Medicare drug discount cards, this pattern of lower
manufacturer price increases after the first quarter of the year is
quite consistent with previous years.
"Nevertheless, the year-to-date increase for 2004
is still nearly double the rate of inflation for the first nine months,"
Gross added.
For most consumers these types of increases are not
sustainable. Seventy-one-year-old AARP member Rosemarie Cola said, "My
husband and I spend over $5,000 a year out of our own pockets for
prescription drugs. It's not easy to make ends meet when drug prices
keep going up so dramatically."
"AARP is engaged in a prescription drug
affordability campaign that is using litigation, legislation and
consumer information to help lower prices. Regular price studies and a
special publication "AARP Rx Watchdog Report," are helping to expose
industry pricing practices to our members and all consumers," explained
Novelli.
In a separate study of the Medicare drug discount
card program referred to in the latest "Rx Watchdog Report," AARP's
Public Policy Institute describes how prices for 227 drugs vary among 33
national Medicare-approved discount cards.
The drug discount card report also shows how prices
vary among pharmacies under each card, how retail pharmacy prices vary
compared with mail order prices, and how some cards consistently offer
lower prices than other cards.
Full results of Trends in Manufacturers Prices of
Brand Name Prescription Drugs Used by Older Americans and the "Rx
Watchdog Report," can be found at
www.aarp.org.
For the home page for the Rx Watchdog Report
Click Here
To read pdf copies of the RX Watchdog Report
Click Here
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