Brand-Name Drug Prices Still Rise Faster Than Inflation

TUESDAY, Sept. 19, 2006 (HealthDay News) -- The prices of the brand-name prescription drugs most used by older Americans continue to increase faster than the rate of inflation, a new report finds.

But, the prices of the 75 generic drugs commonly used by older Americans remain unchanged, according to the AARP's quarterly Rx Watchdog Report, released Tuesday.

In the survey of almost 200 brand-name prescription drugs, AARP found that prices rose 6.3 percent during the 12 months ending with the second quarter of June 2006. This increase exceeded the rate of inflation, which was 3.8 percent over the same period, the group said.

The biggest year-to-date increases were Adventis' Ambien, a sleep aid, 5 milligram (13.3 percent); Boehringer Ingelheim's Combivent, a bronchodilator aerosol (12 percent); Pfizer's Atrovent Inhaler (12 percent); Adventis' Ambien 10 mg. (9.9 percent); and GlaxoSmithKline's Wellbutrin, an antidepressant, 150 mg. (9.4 percent), according to the report.

Aventis had the biggest average six-month price increases, up 7.7 percent. The lowest price increases were for the drug companies Monarch and Takeda (0.0 percent) and Lilly (2.5 percent).

The rate of price increases is the same as it has been in recent years, said report author Susan Raetzman, associate director of the AARP Public Policy Institute. "When you look at how that translates to the cost of the drug to people, it's an increase of over $70 a year for a drug that's taken on a regular basis," she said. "And that's quite a bit higher than it has been in the past."

The typical increase in drug costs for older Americans equals $300 a year, according to the report.

Drug companies keep raising prices because they can, Raetzman said. "There really aren't market forces at work," she said. "They don't have competitors."

Efforts by HealthDay to reach the Pharmaceutical Research and Manufacturers of America, a trade group, for comment were unsuccessful.

Raetzman noted that not only were drug prices increasing for consumers who aren't in prescription drug plans, prices are likely to go up for those in Medicare Part D plans as cost increases get passed along to members. Although these plans purchase drugs at below-retail cost, there is no legal requirement that they pass the savings on to their members, Raetzman said.

To help ease rising drug costs, AARP is supporting a bill in Congress to allow Americans to import drugs from Canada and other western nations.

"We've never been this close to getting meaningful relief from rising prescription drug costs," David Sloane, AARP's senior managing director of government relations, said in a prepared statement. "For the first time, a bill that would allow safe and legal importation of medications has widespread bipartisan support."

Sharon Treat is executive director of the National Legislative Association on Prescription Drug Prices, a nonpartisan, nonprofit group founded by state legislators to make prescription drugs more affordable and accessible to Americans. She said the price increases aren't justifiable, economically or socially.

"I think it's outrageous," Treat said. "The drugs that they sell the most of are the ones that have the biggest increases, which implies it has nothing to do with normal economic theory. People are being ripped off, our government is being ripped off, and people's health is being affected as a result."

In addition, Treat said, it's clear that the Medicare Part D prescription drug plan for seniors that took effect Jan. 1 did nothing to reduce prices. "In fact, prices have now zoomed up more than they had before Part D was passed," she said.

Treat noted that under Part D, the federal government cannot negotiate drug costs. "The government has ceded over to the private sector all the negotiation and has divided up the pool of enrollees, which reduces purchasing power. The end result is that there is no strong push to reduce prices."

Calls by HealthDay to Medicare for comment were not returned.

More information

Visit AARP to view the full report.