The Burrill Report

Average U.S. retail prices for widely used prescription drugs increased by nearly 26 percent between 2005 and 2009, driving up out-of-pocket expenses for many Medicare beneficiaries and pushing the average annual cost for drugs used to treat chronic conditions up $1,152 higher than five years earlier, according to a new analysis by the AARP Public Policy Institute.

“For the people who rely on these drugs, such relentless price increases have serious implications,” says Cheryl Matheis, AARP’s senior vice president for policy strategy. “Despite price reductions for generics, it’s evident that the considerable increases in brand name and specialty drug prices are still leaving Americans with overall costs that are growing far faster than the rate of inflation.”

The growing cost of drugs was attributable almost entirely to rising prices on brand and specialty drugs, according to the report. That increase more than offset substantial price decreases among generic drugs and outpaced the nation’s 13.3 percent general inflation rate during for the entire five-year period from the end of 2004 to the end of 2009. In 2009, the last year of the period examined by the study, retail prices for brand name drugs rose by 8.3 percent, while retail prices for specialty drugs rose 8.9 percent. By contrast, retail prices for generic drugs, which account for 80 percent of the prescriptions dispensed in the United States, fell 7.8 percent that year.

While the Generic Pharmaceutical Association embraced the report as further evidence of the “dramatic savings generic drugs can achieve,” a trade group representing drug industry innovators was not as enthused.

Matt Bennett, senior vice president of the Pharmaceutical Research and Manufacturers of America, issued a statement calling the report “misleading,” accusing AARP of ignoring key facts about the marketplace for prescription medicines and criticizing its methodology. He also pointed to alternate studies by MIT and IMS Health, which found that in recent years, the cost of medicines commonly used by seniors has decreased, not increased.

“Generic drugs result in long-term savings to the healthcare system, but these savings are only possible because innovator companies conducted the extensive research to develop the original brand medicines,” Bennett says. “The innovators’ work and investment leads over time to generic copies that consumers use at low cost for many years.”



March 09, 2012
http://www.burrillreport.com/article-cost_of_drugs_rockets_past_inflation_says_aarp.html