US prescription drug prices rise above inflation
pharmafile | August 27, 2010 | News story | Sales and Marketing | US, prices
A new study of US medicines has found that prices rose 8.3% on average in 2009, well above inflation and faster than in preceding years.
The survey by AARP’s Public Policy Institute also found that average price increases were significantly higher than those for consumer goods and services between 2005 and 2009.
It says this is consistent with the pattern that since the studies of prescription drug prices began in 2004.
Stephen W. Schondelmeyer, the co-author of the report and professor of pharmaceutical economics at the University of Minnesota says the results “confirm yet again that drug manufacturers are raising prices far beyond normal inflation.”
He says the drug industry has criticised AARP’s past reports for focusing on manufacturer prices without taking into account discounts and rebates provided to consumers.
“So this time we looked at retail prices and found that retail pharmacies have no choice but to pass along manufacturer cost increases,” Schondelmeyer says. The 8.3% rise in retail prices in 2009 closely mirrors manufacturers’ price hikes of 9.3 percent.
The AARP report found that all but six of 217 brand-name prescription drugs had retail price increases exceeding general inflation last year. The drug Flomax, generally prescribed for incontinence due to prostate problems, had the biggest price jump, climbing 24.8 percent in 2009. Flomax began facing competition from lower-priced generic drugs in early 2010.
For those taking drugs for a chronic condition, the average retail cost of brand-name medications in 2005—the year before Medicare Part D was implemented—was $1,049. By 2009, that had jumped about 32% to $1,382.
“The coverage of drugs under Part D was supposed to help give access to people who could not afford them,” Schondelmeyer says. “But the drug prices have gone up since Part D began; they haven’t gone down. We thought these plans would negotiate better prices, but they haven’t.”
PhRMA has hit back against these findings. Senior VP, PhRMA, Rick Smith, said that the AARP has “released a distorted and misleading report that doesn’t paint an accurate picture of prescription drug spending in the US”.
He commented that AARP’s report was “misleading” as around “half of the drugs on its top 25 brand-name drug list were filled as generics in the first part of 2010, but AARP counts these drugs as if they were brand-name drugs”.
Smith concluded that this resulted in an “overstatement of consumers’ actual costs” for these medicines, and that there was a “tremendous disparity between AARP’s report” and other independent analyses that have shown a more consistent growth in the price of medicines.
John Rother, AARP executive vice president of policy and strategy, called for action by Congress and the drug industry to bring more competition and transparency to the marketplace. “Unless something is done to bring down their skyrocketing price increases, lifesaving medicines will be out of reach for too many.
Ben Adams
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