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Brand Name drug Prices Up, Generics Level: AARP

Posted on: Tuesday, 16 August 2005, 10:15 CDT

WASHINGTON -- Prices for the brand name prescription drugs most commonly used by older patients rose at a clip three times higher than inflation during the first quarter of this year, while generic drug prices were nearly flat, a report released Tuesday found.

The analysis by the nation's largest lobbying group for the elderly, AARP, measured the prices drugmakers charge wholesale distributors for 195 medicines many elderly patients use, including those to treat high cholesterol, high blood pressure, arthritis pain and osteoporosis.

Wholesalers then distribute medicines to pharmacies that set their own prices to charge consumers.

AARP's report said those drug prices rose 3.3 percent from December 31 to March 31 compared to the general inflation rate of about 1 percent during the same time.

AARP's Policy Director John Rother said the analysis could not show why prices were rising, but that drug firms could do more to lower them. "I think the industry is more concerned about shareholders than they are about the patients who take the pills," he said.

The rate of cost increase for branded drugs dipped overall in the 12 months ending in March, rising 6.6 percent compared to 7.1 percent in 2004, according to the analysis conducted with the University of Minnesota.

Among the 25 drugs with the largest sales, AstraZeneca Plc's blood pressure drug Toprol-XL topped the list with a 6 percent price jump during the first quarter, followed by Bristol-Myers Squibb's cholesterol drug Pravachol at 5.9 percent.

Eight Pfizer Inc. drugs in the top 25 rose 5 percent, including its cholesterol pill Lipitor and painkiller Celebrex. Pfizer is the world's biggest drug maker.

But Rother said rising prices were industry-wide. "It's not just one company. It seems to be across the board," he said.

The group has been lobbying for lower prices for the elderly, including lending support to the new Medicare prescription drug benefit and pushing for drug importation.

While AARP has said it supports the Medicare plan, Rother said there are some concerns that companies are raising prices ahead of the benefit to offset the expected discounts.

Graphic shows average three month percentage change of brand-name prescription drugs by therapeutic category. (AP Graphic)

"While the (Medicare) drug benefit will provide some relief starting in January, I would have hoped the industry would have exercised more self restraint," he said.

Industry group Pharmaceutical Research and Manufacturers of America (PhRMA) said AARP's study was flawed.

Increases in prices consumers actually pay for prescriptions are lower than those for other medical products and services, the group said.

"Their (AARP's) numbers simply do not reflect the true amounts paid by seniors for their medicines," PhRMA spokesman Ken Johnson said.

Government data show consumer drug prices were up 2.6 percent for the year ending in April, below that of cars, gasoline and other goods, PhRMA said.

A second AARP report found manufacturers' generic drug prices were stabilizing after several years of sharp spikes.

Of 75 generic drugs sampled, prices rose 0.7 percent for the 12 months ending in March -- up slightly from the 0.5 percent rise in 2004.

In previous years, generics were up 15.8 percent in 2002 and 13.3 percent in 2003.

Rother said various factors, including growing industry competition and pressure from various state attorney generals, may be curbing prices.

More than a dozen states, including Florida, have sued drug makers over pricing practices.

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On the Net:

http://www.aarp.org/

Source: REUTERS/By Susan Heavey

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