Prices of Commonly Prescribed Drugs for Seniors Outpace Inflation, Families USA Study Finds

The prices of the 50 drugs most commonly prescribed to seniors increased last year at almost three times the rate of inflation, according to a new Families USA study, the New York Times reports. The report, "Bitter Pill: The Rising Prices of Prescription Drugs for Older Americans," examined drugs taken by about 240,000 beneficiaries of a Pennsylvania prescription drug program for seniors (Pear, New York Times, 6/25). Drug prices were based on their use-weighted average wholesale price (VandeWater, St. Louis Post-Dispatch, 6/25). The study found that:

• Prices for the 50 drugs included in the study increased an average of 7.8% last year, compared with a 2.8% rise in the Consumer Price Index;
  
• 18 of the drugs increased in price at a rate at least three times the rate of inflation;
  
• The price of the 40 brand-name drugs in the study increased 8.1%, while the price of 10 generic drugs increased 1.8% (New York Times, 6/25);
  
• Only three of the brand-name drugs and one of the generic drugs did not increase in price;
  
• 42 of the drugs were on the market from January 1997 to January 2002 and increased in price at twice the rate of inflation during that time; and
  
• Five drugs had a least nine price increases during that five-year period (Wall Street Journal, 6/25).

The report shows that "drug companies appeared to be raising prices in the expectation that Congress would soon add drug coverage to Medicare," Stephen Schondelmeyer, the report's lead researcher and a pharmacist and economist at the University of Minnesota, said. But until such legislation passes, seniors should be concerned about the increasing costs, Families USA Executive Director Ronald Pollack said, adding, "Seniors live on fixed incomes that, at best, rise with inflation. ... [D]rugs are consuming a larger share of seniors' budgets, and, over time, they are becoming unaffordable." But drug industry representatives called the report flawed. Pharmaceutical Research and Manufacturers of America spokesperson Jackie Cottrell said the study "ignored the fact that drug prices could vary widely," and PhRMA spokesperson Jeffrey Trewhitt added that the report did not consider drug discounts negotiated by managed care organizations and "other bulk purchasers of drugs" (New York Times, 6/25). The report is available online. Note: You must have Adobe Acrobat Reader to view the report.