Drug Price Increases Double Inflation

Brand name prescription drug prices continue to rise at about twice the rate of inflation, according to the latest AARP Watchdog Report.

AARP’s Watchdog Report found that ten of the brand name drugs it tracks increased at least four times the rate of general inflation during 2006. Ambien led the pack with a 29.7 percentage increase in manufacturer price, followed by Combivent at 18.3 percent and Atrovent Inhaler at 16.9 percent.

"The report highlights that drug prices continue to skyrocket,' said David Sloane, Senior Managing Director, Government Relations & Advocacy. "Over time escalating drug prices will make Medicare drug plans unaffordable for older Americans. One way to address high drug prices is to take full advantage of Medicare’s bargaining power and allow Medicare to negotiate lower drug prices."

Bob Elliott, a 75-year-old retiree from Kentucky, enrolled in a Medicare drug plan in 2006 after losing retiree prescription drug coverage from his former employer. He takes six prescriptions daily and by July 2006 reached the coverage gap, also known as the “donut hole” at which time he began paying full price for his medications. Only two of his medications are available in a generic version. “It was real sticker shock,” said Elliot. "I went from paying a co-payment to full price. My out-of pocket expenses on drugs alone in six months reached $2,000. Prescription drug prices are too high and hit older Americans’ wallets the hardest." As brand name drug prices continue to rise more and more Americans can expect a similar fate.

"We need to send a loud and clear message to the pharmaceutical industry that Americans cannot afford to continue to pay the highest prices for prescription drugs in the world," continued Sloane.

The Watchdog Report shows that nearly 200 of the most commonly used brand name drugs for older adults rose 6.2 percent in 2006, nearly twice the general rate of inflation, which was 3.2 percent. 2006 also marked the first year that the new Medicare drug benefit was in effect.

In contrast, manufacturer list prices in 2006 for 75 generic drugs tracked by AARP’s Watchdog Report fell by 2.0 percent. This continues a downward trend for manufacturer price increases for already lower-priced generic drugs that began in 2003.

Labels: AARP, medical

posted by Consumer Help Web Editorial Team at 7:19 AM |