Prescription drugs account for one-tenth of every dollar spent on healthcare. But some of those drugs are seeing much faster growth in price than others.
The average retail price increases for brand name prescription drugs widely used by older people far outpaced growth in the costs of other consumer goods and services for the year ending with March 2010.
This finding comes from the Rx Price Watch Report just released by AARP's Public Policy Institute.
The average price of 217 brand-name prescriptions most widely used by Medicare beneficiaries rose by 8.3 percent in the 12 months ending with March 2010, higher than any increase in the prior eight years. In contrast, the general inflation rate rose -0.3 percent for the same period.
The brand name prescription drug that saw the biggest jump in retail price in 2009 was Flomax (0.4 mg capsule), which rose 24.8 percent.
The average retail price hike for widely used brand name drugs on the market from the end of 2004 through 2009 was 41.5 percent, compared to a 13.3 percent general inflation rate.
While the numbers may be shocking, drug industry officials note that a broader survey of drug prices showed that they rose 3.4 percent in 2009, the New York Times reports.
John Vernon, an assistant professor of health policy at the University of North Carolina, Chapel Hill, told the Times the AARP report is misleading. "It can easily be shown that branded prices are higher here than they are in other countries, but we have the lowest and the most competitively priced generic drugs in the world, and the generic share is going up rapidly," he said. "Just focusing on brands I think is unfair."
Industry officials noted that more people buy low-price generic drugs. Generics make up 75 percent of all prescriptions dispensed in the U.S., according to market research firm IMS Health.
The price of generic prescription drugs held steady or declined, AARP Executive Vice President for policy and strategy John Rother told the Times.
To learn more:
- see the AARP report on brand-name drug prices
- read the New York Times story
- here is the article in The Consumerist
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