WEDNESDAY, Nov. 2, 2005 (HealthDay News) -- Prescription drug prices continue to outpace the rate of inflation, although the rate of increase is slightly less than it has been in the past two years.
Prices of generic drugs, on the other hand, are holding steady, according to a periodic review of drug prices conducted by AARP.
"When the Medicare drug benefit was passed, AARP issued a challenge to the drug industry to keep increases at least to the rate of inflation until people had better coverage. By and large, that's not happening," said David Gross, lead author of the report, which was issued Wednesday. "Prices are going up more than twice the rate of inflation."
"The overall trend for many years now is that drug prices go up substantially more than the rate of inflation, and that continues to be the case," added Sharon Treat, executive director of the National Legislative Association on Prescription Drug Prices (NLARX). "Even though it's up less than in the previous quarter, it is still a substantial increase, and this is added on to increases from previous quarters."
AARP releases its Rx Watchdog Report periodically in an attempt to track seasonal and annual changes in drug pricing for its 35 million members aged 50 and older. The group bases its figures on changes in the manufacturer's list price for their drugs -- the prices drug companies use when selling to wholesalers. This latest report was published by AARP's Public Policy Institute, in conjunction with the PRIME Institute of the University of Minnesota.
For this latest survey, which tracked prices from Dec. 31, 2004, to June 30, 2005, AARP focused on 193 big-selling brand-name prescription drugs, as well as 75 leading generic medications.
According to the report, the average annual rate of price increase for the year ending June 2005 was 6.1 percent, vs. 7.1 percent for 2004 and 7 percent for 2003.
By comparison, the rate of general inflation was 3 percent, the report said.
Almost three-quarters of the drugs in the sample (142 of 193) had increases during the first six months of 2005. All of the increases were almost twice the rate of inflation or more.
One small bright spot: The average annual cost of drug therapy to treat chronic conditions rose at a slower pace than before. For the year ending June 30, the average annual increase was $32.38, compared with $51.56 for 2004 and $48.05 for the 12 months ending in March 2005.
According to the report, a typical older American who takes three prescription drugs a day is likely to be paying an additional $97.14 for the 12 months ending June 30, compared with $154.68 for 2004 and $144.15 for the 12 months ending in March 2005.
Among the 25 brand-name drugs with the greatest sales in 2003, Actonel 35 milligrams, an osteoporosis drug made by Proctor & Gamble, had the highest six-month increase: 7.5 percent. Next was another osteoporosis drug, Evista 60 milligrams, made by Lilly, which rose 6.2 percent.
The beta blocker Toprol XL 50 milligrams, made by AstraZeneca, rose 6 percent, while Pravachol (40 and 20 milligrams), a statin made by Bristol-Myers Squibb, rose 5.9 percent. Levaquin 500 mg, an antibiotic made by McNeil, rose 5.6 percent.
Two of the 25 drugs (Zocor 20 mg, a statin made by Merck, and Prevacid 30 mg, a proton pump inhibitor made by TAP) had no price changes during the first two quarters of 2005. The arthritis drug Vioxx, a cox-2 inhibitor manufactured by Merck, was not included in the analysis because it was taken off the market in September 2004 after studies linked it to an increased risk of heart attack and stroke.
Almost three-fourths of manufacturers (14 of 20) had average six-month price increases of at least twice the rate of general inflation during the first half of 2005, the report found.
By contrast, none of the 75 generic drugs tracked had a change in manufacturer list price during the second quarter of 2005. Three had increases in the first quarter of the year.
For the 12 months ending in June 2005, prices for generics rose by 0.9 percent, the report stated.
Overall, though, the price pressure on consumers and states will likely continue, consumer advocates said.
"Drugs are overpriced in general, and because we are one of the only countries that truly does not negotiate or set prices, our consumers are paying the price," said Treat, of NLARX, a nonprofit group that works with state legislators to make prescription drugs more affordable.
"Unless we take significant steps to address that, it's going to continue to be the problem," Treat added. "States have attempted to address this, but are somewhat constrained in what they're allowed to do. It raises the question of why Congress is not taking steps to amend this. As long as Congress doesn't act, I think you're going to see states be as creative as they can in doing something themselves."
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