Brand name
drug price increases reach five-year high
WASHINGTON,
April 12, 2005 - The average increase in the price manufacturers
charge for brand name prescription drugs. significantly outpaced
inflation for the fifth straight year according to a new AARP "Rx
Watchdog Report" study released today. The report, "Trends in
Manufacturer Prices of Brand Name Prescription Drugs Used by Older
Americans-2004 Year-end Update," was prepared by the AARP Public
Policy Institute (PPI) in conjunction with the PRIME Institute of
the University of Minnesota as part of a continuing series of
reports that regularly analyze prescription drug price trends.
The current
"Rx Watchdog Report" study describes changes in the prices
prescription drug manufacturers charged wholesalers in 2004 for 195
brand name prescription drugs widely used by Americans age 50 and
older. The study found that the average price increase during 2004
was 7.1 percent.
Compared to
the 2004 general inflation rate of 2.7 percent, the price hikes are
the biggest one-year increase levied by brand name manufacturers in
any of the past five years.
Since the end
of 1999, manufacturers of 153 of these brand name drugs have raised
their prices over two-and-a-half times the rate of general
inflation. During that time, manufacturers' drug prices have
increased 35.1 percent on average, compared to an inflation rate of
13.5 percent.
An AARP
baseline study published in May 2004 identified accelerating
increases in the average manufacturer price from calendar year 2000
through calendar year 2003; two updates reported continued price
increases through the third quarter of 2004.
The study
also reports on price changes for 24 of the 25 top selling
brand-name drugs in 2003 that stayed on the market throughout 2004.
All but one drug had manufacturer price increases that exceeded the
2004 rate of general inflation and 16 drugs had price increases at
more than double that rate. The highest percentage increase was 11.9
percent for the sleep medication Ambient 10 mg tablets; the lowest
was 1.5 percent for Flomax 0.4 mg capsules. Prilosec 20 mg,--a drug
that is also available both in generic form and over the counter was
the only drug not to experience a price increase in the year.
AARP CEO Bill
Novelli said, "We are disappointed that brand name manufacturers
have failed to keep their price increases in line with inflation
despite consumer appeals for them to hold the line. Much more needs
to be done to slow down spiraling drug pricing."
He added,
"AARP is working to lower the cost of prescription drugs for all
Americans. We have introduced evidence-based research to our members
through the AARP website that will help patients choose the most
cost-effective medication for their needs."
AARP is also
helping states find ways to lower the cost of prescription drugs for
their Medicaid and state drug assistance programs and the
organization continues to support legislation that will legalize the
safe reimportation of prescription drugs from Canada and other
countries. AARP also favors giving HHS the authority to negotiate
drug prices for Medicare if private health plans are unable to
negotiate lower costs.
"We will
continue to work with all parties involved in an effort to make
prescription drugs more affordable for our members and every
American seeking quality, affordable health care," Novelli said.
The one ray
of good news comes from a companion report issued by PPI, "Trends in
Manufacturer List Prices of Generic Prescription Drugs Used by Older
Americans- 2004 Year-End Update", also conducted in conjunction with
the PRIME Institute of the University of Minnesota. The report found
that, on average, manufacturers' list prices for 75 generic drugs
commonly used by Americans 50 and over only rose 0.5 percent in
2004, less than one-fifth the general inflation rate of 2.7 percent
during the same period. This is a dramatic deceleration in the rate
of increase from that of 2003, when the average rate of increase was
13.3 percent for generic manufacturer's prices. Copies of both
reports may be found on the AARP website at
www.aarp.org .
AARP 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. We produce AARP The
Magazine, published bimonthly; AARP Bulletin, our monthly newspaper;
AARP Segunda Juventud, our bimonthly magazine in Spanish and
English; NRTA Live & Learn, our quarterly newsletter for 50+
educators; and our website,
www.aarp.org.
AARP Foundation is our affiliated charity that provides security,
protection, and empowerment to older persons in need with support
from thousands of volunteers, donors, and sponsors. We have staffed
offices in all 50 states, the District of Columbia, Puerto Rico, and
the U.S. Virgin Islands.
The one ray
of good news comes from a companion report issued by PPI, "Trends in
Manufacturer List Prices of Generic Prescription Drugs Used by Older
Americans- 2004 Year-End Update", also conducted in conjunction with
the PRIME Institute of the University of Minnesota. The report found
that, on average, manufacturers' list prices for 75 generic drugs
commonly used by Americans 50 and over only rose 0.5 percent in
2004, less than one-fifth the general inflation rate of 2.7 percent
during the same period. This is a dramatic deceleration in the rate
of increase from that of 2003, when the average rate of increase was
13.3 percent for generic manufacturer's prices. Copies of both
reports may be found on the AARP website at aarp.org.
AARP 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. We produce AARP The
Magazine, published bimonthly; AARP Bulletin, our monthly newspaper;
AARP Segunda Juventud, our bimonthly magazine in Spanish and
English; NRTA Live & Learn, our quarterly newsletter for 50+
educators; and our website,
www.aarp.org.
AARP Foundation is our affiliated charity that provides security,
protection, and empowerment to older persons in need with support
from thousands of volunteers, donors, and sponsors. We have staffed
offices in all 50 states, the District of Columbia, Puerto Rico, and
the U.S. Virgin Islands.