Drug prices rise far above inflation
By Marc Kaufman and Bill Brubaker
Washington Post
WASHINGTON — The price of name-brand prescription drugs most used by seniors has increased by rates substantially above inflation for the past four years, undercutting the potential value of the new Medicare drug discount card, two senior advocacy groups reported yesterday.
In a study tracking the prices of 197 of the most widely used brand-named drugs from 2000 to 2003, the group AARP found a cumulative increase of 27.6 percent as compared with a general inflation increase of 10.4 percent.
Analyzing the prices of the top 30 name-brand drugs prescribed for seniors, Families USA found an increase on average 4.3 times greater than inflation between January 2003 and January 2004.
The AARP report also found that the price escalation has picked up during the past four years: About one quarter of the most-used name-brand drugs more than doubled the general inflation rate in 2000, while 87 percent of those same drugs doubled the inflation rate in 2003.
The price increases raise the politically sensitive question of how much seniors will really save by using the Medicare cards, which have promised discounts of up to 25 percent for brand-name medications when they go into effect on June 1.
Earlier this year, Health and Human Services Secretary Tommy Thompson dismissed suggestions that the value of the Medicare discount cards would be significantly eroded by drug company price increases and said that all seniors who use the card will benefit financially. But Ron Pollack, executive director of Families USA, said yesterday that the drug cards will give little or no help to most seniors because of the price increases.
"It's the functional equivalent of going to a used car salesman and being told you're getting a great deal because you got a $3,000 discount," he said. "Only before you came, he raised the price of the car by $4,000."
As the nation's overall drug budget has increased by double-digit rates in recent years, the Pharmaceutical Research and Manufacturers of American has said most of the increase is the result of greater use of prescription drugs rather than inflation in drug prices.
A spokesman yesterday said the organization is analyzing the two new reports to determine whether they are accurate and whether they take into account the sometimes large discounts that manufacturers give to major suppliers of prescription drugs.
Because those discounts are considered confidential business information, they are not made public and so cannot be analyzed. Both AARP and Families USA said they used the published price manufacturers charge to wholesalers to make their comparisons.
According to Families USA, the price of the five most prescribed drugs for seniors increased at an especially fast rate last year. Lipitor, used to lower cholesterol, rose 5.5 times more than inflation; blood-clot preventer Plavix increased 5.3 times inflation; osteoporosis drug Fosamax increased 4.6 times inflation; blood-pressure medication Norvasc increased 6.6 times inflation; and arthritis drug Celebrex rose by 5.4 times inflation.
And the price increases appear to be continuing. Last week, for instance, Merck & Co. Inc. acknowledged that it increased the price of arthritis medication Vioxx 4.8 percent on March 31.
Earlier this year, the AARP asked the drug industry to hold its price increases to the general rate of inflation. The group, criticized by members and Medicare advocates for its support of the Bush administration prescription drug plan, said its top priority this year is to lower prescription drug costs.
