The findings of AARP's latest report on pharmaceutical drug pricing strongly mirror AARP's earlier report on drug pricing for the years 2000 through 2003. In that study we found that manufacturers' price increases for widely used brand name prescription drugs rose from 4.1% in 2000 to 6.9% in 2003. This latest report, by AARP's Public Policy Institute (PPI), found that the annual rate of increase in these prices rose to 7.2% for the 12 months ending in March 2004. This increase is particularly troubling because the rate of inflation actually declined from 2.3% in 2003 to 2.0%.

The report focuses on 197 of the most frequently used brand name drugs by persons 50 and older. For the three-month period ending March 2004, 16 of the top 25 most frequently used drugs experienced price increases while nine drugs among the top 25 did not witness an increase in cost. Two drug manufacturers, Bristol-Myers Squibb and Pfizer have 12 of the top 25 selling drugs and all 12 of those drugs experienced a price increase. Price increases for Pfizer drugs ranged from a 2.9% increase Lipitor (20mg) to a 6.4% rise in price for Neurontin (300mg). Bristol-Myers Squibb (BMS) had four drugs in the top 25 most frequently prescribed drugs. Two of BMS' drugs, Pravachol (20mg and 40mg) and Plavix (75mg,) experienced price increases of 7.0% and 7.9% respectively.

However, some drug manufactures were able to hold the line during the first quarter. For Merck, which had three drugs in the top 25, only Fosamax (70mg) had an increase in price (4.9%), while Vioxx (25mg) and Zocor (20 mg) saw no change in price.

These figures reflect only price increases for the first three months of the year and are not absolute indicators of prices for the remainder of 2004, but the rising trend in pricing continues to be of great concern to American consumers given the fact that these prices outpace inflation. For those on modest and fixed incomes these price increases are particularly troubling. As noted in the earlier report, Social Security income, which is pegged to the general rate of inflation and exceeds the growth of median income for people 50-64.