Wholesale Drug Prices Increase at Twice Inflation Rate, AARP Report Finds
Wholesale prices for brand-name prescription drugs increased at twice the inflation rate for the one-year period that ended on June 30, according to a report released on Wednesday by AARP, USA Today reports. For the report, AARP tracked wholesale prices charged by pharmaceutical companies for the 200 brand-name prescription drugs most commonly used by U.S. residents ages 50 and older, as well as prices for the 75 most commonly used generic medications (Appleby, USA Today, 11/2).
Wholesale prices for brand-name prescription drugs increased by about 6.1% for the year, compared with an inflation rate of 3%, the report found. In addition, the report found that wholesale prices for generic medications increased by about 0.9% for the year (Freking, AP/Hartford Courant, 11/2).
According to the report, the brand-name prescription drugs with the highest rates of increase in wholesale price for the year included the emphysema medication Atrovent and the insomnia treatment Ambien. The wholesale price for a one-day supply of Atrovent increased by more than 18% for the year, from $2.12 to $2.51, and the wholesale price for a one-day supply of Ambien increased by more than 14%, from $2.19 to $2.50, the report found (USA Today, 11/2).
The report also found that annual prescription drug costs for the average U.S. resident age 50 or older who took three medications increased by $97 (Heldt Powell, Boston Herald, 11/2).
A statement released by the Pharmaceutical Research and Manufacturers of America criticized the AARP report. According to PhRMA, the report should have examined retail prices, rather than wholesale prices, and did not account for discounts provided to large prescription drug purchasers. PhRMA also said that the consumer price index indicated a 4.2% medical inflation increase and an average prescription drug price increase of 3.4% between July 2004 and July 2005.
In addition, according to some analysts, the report does not indicate most U.S. residents have health insurance that covers some or all of their prescription drug costs.
Joe Antos, a health policy analyst at the American Enterprise Institute, said, "What they've been trying to measure, even if they were successful at measuring that, really hasn't had a lot of relevance to many people in this country."
However, Consumers Union spokesperson Steven Findlay said that the report highlights important trends over time.
John Rother, policy director for AARP, added, "We're putting a spotlight on what manufacturers are charging, which is by far the most significant part of the price equation" (USA Today, 11/2).
The report is available online. Note: You must have Adobe Acrobat Reader to view the report.