AARP Slams Rising Brand-Name Drug Prices

AARP says brand-name drugs prescribed to senior citizens rose 8.3 percent in 2009, despite the recession.  The 217 most commonly used brand-name drugs prescribed to senior citizens rose in price by 8.3 percent in 2009, according to a new study by AARP. What is especially startling about this number is that the largest increase in years occurred in a deflationary time.  Retail prices for the most popular brand-name drugs have risen 41.5 percent over the last five years.  Contrast that with the Consumer Price Index, which increased just 13.3 percent during the same timeframe.

Pharmaceutical manufacturers are disputing the numbers, claiming that select brand-name prices did not account for the fact that more people are using lower-priced generic drugs.  Generics make up approximately 75 percent of all prescriptions filled in the United States, according to research firm IMS Health.  The pharmaceutical industry cited a government survey that showed drug prices rose by just 3.4 percent during 2009.  According to Jonathan Church, an economist with the Bureau of Labor Statistics, his study included generic and brand-name drug prices.

John A. Vernon, an assistant professor of health policy at the University of North Carolina, Chapel Hill, lauded AARP for adapting its methodology to count retail prices instead of wholesale.  Still, he noted, the study is flawed.  “It can 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.”

John C. Rother, AARP’s senior vice president for policy and strategy, is in agreement that generic drug prices have been stable or even fallen.  He added that the new retail price analysis demonstrates why many older Americans still struggle to pay for brand-name drugs they need to manage chronic medical conditions.  “Brand-name retail prices have been accelerating year-to-year even when inflation has been nonexistent in the rest of the economy,” he said.

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