Prices of Brand-Name Drugs Continue Their Steep Rise
By: Source: AARP.org Date Posted: 2007-02-01 15:30:00-05:00
During the 12-months ending September 2006, the prices manufacturers charge wholesalers and other direct purchasers for 193 brand-name drugs widely used by older Americans continued to rise much faster than the general inflation rate. The manufacturer’s price increase for brand-name drugs, on average, was 6.2 percent—more than one-and-ahalf times the inflation rate of 3.7 percent.
During the same 12-month period, the wholesale list prices set by manufacturers for 75 generic drugs widely used by older Americans decreased, on average, by 0.7 percent.
The increase in brand-name prices for the 12-month period ending in September 2006 is higher than that reported for the full year of 2005, which was 6.0 percent. Inflation during 2005 was 3.4 percent.
A Hit to the PocketbookIf the manufacturers’ price increases were passed on to consumers and other payers, the cost of a brand-namemedication used to treat a chronic condition would have gone up about $68, on average, over the 12months ending September 2006, a substantial rise over the $47 average annual increase seen in 2005.
But the typical older American regularly takes four prescription drugs. Thus, the total cost of a typical individual’s therapy would have gone up, on average, $270 in the 12 months ending September 2006 if all the drugs were brand-name products and if the manufacturers price increases were passed on to the consumer.
The sample of brand-name drugs includes 187 drugs used to treat chronic conditions such as high cholesterol, osteoporosis and high blood pressure. As such, they are used by millions of older Americans on a regular basis over a sustained period. So it is here that steep increases in prescription drug costs are felt most sharply.
Substantial Price Hikes Followed Introduction of Part DThe Medicare Modernization Act of 2003, which makes a prescription drug benefit available to 44 million Medicare beneficiaries, went into effect Jan. 1, 2006. Between then and the end of September, manufacturers raised the prices they charge for 193 brand-name products widely taken by older Americans, on average, 4.6 percent. Inflation for the first nine months of 2006 was 2.5 percent.
Seven drugs in the sample had double-digit increases during that time. Ambien, a drug made by Aventis that is frequently prescribed for sleeplessness, had the highest increases: Ambien 5mg went up an eye catching 18.9 percent while the increase for the 10mg dose was 15.4 percent.
Proctor and Gamble raised the price of its treatment for inflammation of the colon, Asacol 400mg, 13.4 percent from January to September 2006. Two inhalers made by Boehringer Ingelheim, Combivent 120-20mcg/act and Atrovent 18mcg/act, are on the list of drugs with nine-month price increases of 10 percent ormore, as are Janssen’s Risperdal 1mg, which is prescribed for schizophrenia, and Novartis’ Miacalcin 200 IU/AC, a treatment for osteoporosis.
Through its Rx Watchdog project, AARP monitors price changes by manufacturers of brand-name and generic drugs and reports its findings to its members and the general public. This AARP Rx Watchdog is based on two reports by the AARP Public Policy Institute. Visit AARP Rx Watchdog online.
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