AARP Says
Brand-Name Drug Prices Up 8% in 2009
Published: August 24, 2010 - New York Times
A new report on retail prices of brand-name drugs shows the 217 products most
used by older Americans increased by an average of 8.3 percent during 2009, the
largest increase in years, even as inflation was negative.
Over the last five years, according to the report to be released on Wednesday
by the senior lobby AARP,
the retail prices for the most popular brand-name drugs increased 41.5 percent,
while the consumer
price index rose 13.3 percent. An AARP official called for measures to hold
down drug prices.
Drug industry officials challenged the finding, however, saying select
brand-name prices did not reflect the reality of more people using low-price
generic drugs. Generics now account for about 75 percent of all dispensed prescriptions
in the United States, according to IMS Health, a research firm.
The industry pointed to a broader survey of drug prices showing they rose by
3.4 percent during 2009. The survey, conducted by the government for its
official Consumer Price Index, includes generic as well as brand-name drug
prices, Jonathan Church, an economist at the Bureau
of Labor Statistics, said on Tuesday.
John A. Vernon, an assistant professor of health policy at the University
of North Carolina, Chapel Hill, praised the AARP for changing its methods to
count retail prices instead of wholesale prices. But Professor Vernon, who had
consulted for drug companies and challenged the AARP wholesale price report at a
Congressional hearing last year, said its new report was still flawed.
gIt 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,h he said.
gJust focusing on brands I think is unfair.h
John C. Rother, executive vice president for policy and strategy for the
AARP, agreed that generic drug prices had held stable or declined. But he said
the groupfs new retail price analysis showed why many older Americans were
struggling to pay the cost of brand-name drugs they needed for chronic medical
conditions.
AARP has changed the method of its annual drug report to look at retail
prices, responding to industry complaints last year that measures of wholesale
prices, showing brand-name increases far in excess of inflation, were misleading
because they did not consider manufacturer discounts. The new report, however,
finds the same result on price.
gBrand-name retail prices have been accelerating year-to-year even when
inflation has been nonexistent in the rest of the economy,h Mr. Rother said in
an interview by phone Tuesday.
The incontinence drug Flomax led the way with a 24.8 percent rise in retail
price last year, to $4.09 a pill. Flomax sells for $4.42 a pill on drugstore.com,
while its generic equivalent, tamsulosin, sells for $3.63 a pill.
Ann Wainwright, a spokeswoman for Boehringer Ingelheim, did not answer
questions about Flomax prices in an e-mail, but said the company was committed
to access to medicines, including free medication for eligible low-income
patients.
The Flomax patent expired this year, opening the gates for generic
competition.
During 2009, among the most popular brand-name drugs, retail prices rose 6
percent, to $5.40 a day, on Nexium from AstraZeneca;
8.8 percent, to $5.06 a day, on Plavix from Bristol-Myers
Squibb; 7 percent, to $5.50 a day, on Prevacid from Takeda; 6.8 percent, to
$4.21 a day, on Protonix from Wyeth;
and 4.1 percent, to $4.03, on Lipitor
20-milligram tablets from Pfizer,
the report says.
The AARP reported overall increases of 8.3 percent in 2009, 7.9 percent in
2008, 7 percent in 2007, 6.1 percent in 2006, when Medicare
drug benefits started, and 6 percent in 2005. The Bureau of Labor Statistics,
including generic prices, reported drug price increases for the same years of
3.4, 2.5, 1.4, 4.3 and 3.5 percent. Both used weighted averages to account for
product usage.
The AARP report says many older Americans rely on brand-name drugs for
chronic illnesses. It says higher prices push them more quickly into a coverage
gap known as the gdoughnut hole,h where they have to pay the full cost of drugs.
That gap is being phased out over the next 10 years under the new health care
law, including drug industry discounts on brand-name drug prices in the coverage
gap.
The Pharmaceutical Research and Manufacturers of America, the industry trade
group in Washington, released a statement on Tuesday saying gprescription
medicines represent a small and decreasing share of growth in overall health
care costs in the United States.h
gNot only is the recent rate of growth for prescription medicines
historically low, but the recent decline in drug spending growth has contributed
to one of the lowest rates of total health care growth in the past 50 years,h
the group said.
The statement cited reports that Medicare drug spending had been far less
than initially projected, partly due to generics.