Prescription Drug Prices Increased by 5.5% in First Half of 2005, Data Indicate
Prescription drug prices increased by 5.5% in the first half of 2005, about the same rate that they increased in the first half of 2004, according to data recently released by New York-based health care marketing and research company Delta Marketing Dynamics, the Wall Street Journal reports. DMD provides current data on prescription drug prices for pharmaceutical and health care companies and industry analysts.
From Jan. 1 to June 30, the prices of the top 100 brand-name prescription drugs increased an average of 5.53%, compared with 5.62% for the same period in 2004, DMD data indicate. The prices of the top 50 of those medications increased by an average of 5.11% from Jan. 1 to June 30, compared with 5% for the same period in 2004, and the prices of the bottom 50 increased by an average of 6.62%, compared with 6.32% in the same period in 2004, according to DMD data.
DMD based the data on wholesale acquisition costs.
Some analysts had predicted that pharmaceutical companies would increase prices at higher rates before the launch of the Medicare prescription drug benefit on Jan. 1, 2006, "when greater pricing pressures are expected," the Journal reports. According to the Journal, one "factor weighing on drug price increases might be that drug companies are eager to get on the Medicare drug formularies, where price could be an important factor."
DMD President Bill Little said that the decision not to increase prices at higher rates allows the pharmaceutical industry to maintain "reasonable brand-revenue growth without damaging its ability to negotiate contracts or drawing negative press."
However, prescription drug prices increased at a higher rate than general inflation, which was 2.5% in the first half of 2005, according to the Consumer Price Index. The rate of increase in prescription drug prices "remains fairly substantial," Richard Evans, a pharmaceutical industry analyst at Sanford Bernstein, said (Won Tesoriero, Wall Street Journal, 8/2).