Healthy Skepticism Library item: 5506

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Publication type: news

Young K.
Brand-Name Drug Prices Rise Faster Than Inflation in U.S. Study
Bloomberg 2006 Jun 21
http://www.bloomberg.com/apps/news?pid=10000087&sid=aT609ezo_jpY&refer=top_world_news

Full text:

Brand-Name Drug Prices Rise Faster Than Inflation in U.S. Study

June 21 (Bloomberg) — Drugmakers raised U.S. prices for brand-name medicines in the first quarter almost four times as fast as inflation while generic prices were unchanged, two reports found.

The average price for the most widely prescribed brand-name drugs, including cholesterol and sleeping pills, rose 3.9 percent in the first quarter, said AARP, a consumer group for people 50 and older. Inflation was 1.1 percent in the first three months this year, according to the U.S. Labor Department.

The jump in prices for branded medicines was the biggest in the six years AARP has been compiling the report. The Washington-based group called the increase a ``disturbing reversal’‘ as the rate of drug-price gains had been slowing since mid-2004. The quarter was the first in which drugmakers didn’t raise generic prices since AARP began tracking increases in 2001.

``It highlights the payoff of moving people away from brand-name drugs and toward generics,’‘ said Larry Levitt, vice president of the Kaiser Family Foundation, a nonprofit organization based in Menlo Park, California, that focuses on health care. ``Not only are they cheaper, but the gap between the price for generics and the price for brand-name drugs is growing.’‘

AARP analyzed generic and brand-name drug prices in two separate reports released today. The first report examined the prices paid by wholesalers for 193 of the most widely prescribed brand-name medicines, such as Pfizer Inc.‘s Lipitor. Lipitor, the world’s best-selling drug, had a 6.5 percent price increase in the quarter.

Ambien’s 9.9 Percent

The biggest rise was 9.9 percent for French drugmaker Sanofi-Aventis SA’s Ambien sleeping pill, the report found.

Pfizer raised the wholesale cost for most of its prescription products Jan. 1 for the first time in 12 months, said Vanessa Aristide, a company spokeswoman, in an e-mailed statement. The increases included 5.4 percent for Lipitor, she said.

Consumers may be seeing bigger increases because the average co-payment charged by medical insurance companies rose 11 to 15 percent a year from 2001 to 2005 while Pfizer’s average retail price increase was 3.3 percent, Aristide said, citing a 2005 survey by the Kaiser Family Foundation.

Sanofi prices Ambien more competitively than rival sleeping pills, said Marc Greene, a company spokesman, in an e-mailed statement.

The second AARP report examined the prices of the 75 generic drugs most often prescribed for Americans 50 and over. Less information is available about generic than brand-name drugs, limiting the AARP’s analysis, the organization said. The research is based on the highest possible cost for a generic drug and doesn’t include discounts.

Drugmakers Comment

``Contrary to AARP’s erroneous conclusions, there is good news for America’s seniors,’‘ said Ken Johnson, a spokesman for the Pharmaceutical Research and Manufacturers of America, a Washington-based industry trade group, in an e-mailed statement. ``The latest official U.S. Government data from the Bureau of Labor Statistics show that drug prices are growing at a rate identical to medical inflation, an increase of 1.6 percent from January 2006 to May 2006.’‘

Families USA, a separate Washington-based consumer group, yesterday issued a report finding ``virtually all’‘ of the insurance plans administering a federal drug benefit had raised their prices for medicines this year.

To contact the reporter on this story:
Kerry Young in Washingt@bloomberg.net.

Last Updated: June 21, 2006 00:03 EDT