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Prescription Drug Prices On The Rise

Posted on: Thursday, 16 April 2009, 13:50 CDT

AARP’s annual study, released Wednesday, stated that prices of the most popular brand-name prescription drugs are on the rise even as the economy falters, the Associated Press reported.

It also found prices of generic drugs are falling as a growing number of seniors are making the switch to generics, an encouraging trend the powerful senior citizens' lobby hopes will continue.

The group is also asking policy makers to focus on how to bring drug prices down as Congress prepares legislation to reshape the nation's costly health care system.

According to the AARP, prices manufacturers charged for the most widely used brand name drugs rose 8.7 percent in 2008, higher than in years past.

In 2008, the general inflation rate was 3.8 percent.

John Rother, the AARP's public policy director, said just about everybody in today's economy is feeling some economic pressures and it does not help that the drugs you take to keep healthy are much more expensive than last year.

"I think this makes the case for health reform," he added.

However, some critics of the AARP's report, like drug lobby group Pharmaceutical Research and Manufacturers of America, dismissed the report as "one-sided," saying it only focuses on selected brand-name medications.

PhRMA's senior vice president, Ken Johnson, said in a statement: “Unfortunately, AARP distorts the true, overall picture in hopes of dramatizing its report and deflecting attention from the millions of dollars it earns each year from its insurance businesses.”

But the AARP report cited growing costs of what it said were the 219 most widely used brand-name drugs, including Prevacid, for acid reflux; Wellbutrin, for depression; and Lunesta, for sleeping.

Each drug went up significantly: Prevacid went up by 30 percent, Wellbutrin by 21 percent and Lunesta by 20 percent.

Some of the increases to drug makers were attributed to an attempt to boost profits amid an economic downturn as they confront the prospect of congressional action on health care that could change the marketplace, according to several financial analysts.

Experts acknowledged that many of the brand-name drug prices are increased shortly before their patents expire and they become available as generics. Prevacid is one example that is going off-patent in November.

“The increases make the case for policy changes such as allowing the government to negotiate drug prices or reimportation of drugs from other countries so Americans can pay the lower prices typically charged elsewhere,” Rother said.

AARP is also hoping Congress will address the gap in coverage — included in the 2003 law to keep down costs — that occurs once the cost of a patient's prescriptions exceeds about $2,700.

The next $4,350 will have to be covered by patients until Medicare coverage starts back up again.

Generic drug costs fell an average of 10.6 percent in 2008, the AARP's report said.

Costs grew 3.5 percent last year, according to a government survey released in February that counted all prescription drug expenditures, including generics.

Federal economists attributed that slowdown from 2007 to increased use of generics and more people filling fewer prescriptions during the economic slowdown.

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On the Net:

• AARP
• Pharmaceutical Research and Manufacturers of America

Source: redOrbit Staff & Wire Reports

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