Brand-Name Wholesale Drug Prices Increase
Wholesale prices for brand-name prescription drugs increased by an average of 6% in 2005, and wholesale prices for generic medications decreased by an average of 0.8%, according to a report released on Monday by AARP, USA Today reports.
For the report, AARP examined wholesale prices for the 193 brand-name prescription drugs and 75 generic medications most commonly used by U.S. residents ages 50 and older. The report finds that wholesale prices increased for all but five of the brand-name prescription drugs that were on the market for all of 2005 and that 84% of those price increases exceeded the rate of general inflation.
However, the 6% increase in wholesale prices for brand-name prescription drugs was the smallest since 2001, according to the report. John Rother, policy director for AARP, said, "Drug prices are going up faster than inflation, and we need to do more to keep them affordable."
The Pharmaceutical Research and Manufacturers of America and some health care policy analysts criticized the report because they said that wholesale prices do not account for discounts provided to large purchasers of prescription drugs, such as pharmacies and health insurers, and that U.S. residents with health insurance pay only a small part of the prices of medications.
Joseph Antos of the American Enterprise Institute said that the report applies only to U.S. residents "without insurance and those who, for some reason, are still buying brand-name products instead of generics." However, according to the report, wholesale prices often represent the initial prices used by pharmaceutical companies in negotiations with private health insurers and public programs such as Medicaid (Appleby, USA Today, 4/10).