- The Washington Times - Tuesday, April 12, 2005

Wholesale prices for name-brand drugs rose an average 7.1 percent in 2004 — the largest increase in five years and more than twice the rate of inflation, according to a report released yesterday by AARP.

The price jump is the biggest since 2000, when the Washington senior citizen association started its annual Rx Watchdog Report. In 2003, drug prices rose an average 7 percent.

The report tracked prices for 195 brand-name prescription drugs — 153 of which have been on the market since 2000 — that are widely used by older Americans.

The report did not offer a cause for the increases, but consumer groups blamed the drug industry.

Gail Shearer, health policy analysis director for Consumers Union, said lack of competition in the pharmaceutical industry was a main contributor to rising prices for brand-name drugs.

“It’s an uncompetitive marketplace, where patents provide protection to manufacturers to keep prices high,” Ms. Shearer said.

Higher wholesale prices meant higher drug costs for consumers, especially those taking multiple medications.

About 44 percent of the U.S. population is on at least one medication, with 17 percent of those people taking three or more prescriptions, according to the U..S. Department of Health and Human Services.

Americans taking three prescription drugs in 2004 faced an average increase of $154.68 in the cost of their therapy, the report said.

Drugs for chronic illnesses, which often require a lifelong treatment, cost nearly $241 more last year than in 1999, the report said.

Premarin, which is used in hormone-replacement therapy, had the largest price spike in 2004 at 26.2 percent. Consumers taking 0.3 milligram tablets of Premarin paid $200 more in 2004 than five years earlier, the report said.

None of the prices for the prescription brand-name drugs fell in the report. But Prilosec, which is sold over the counter and has a generic version, posted no price change in 2004.

The study found manufacturer prices rose sharply in the first part of 2004, but moved up at a slower pace starting in June when the Medicare prescription-drug discount card was introduced.

Ms. Shearer said prescription-drug prices could drop once the Medicare drug benefit starts in January. The Medicare program will provide prescription-drug savings for senior citizens and people with disabilities.

But the price reduction would not be significant because the federal government will not directly negotiate prices with pharmaceutical manufacturers, she said.

The Pharmaceutical Research and Manufacturers of America, an industry trade group, yesterday countered AARP’s report with its own report.

The PHRMA study, conducted by global consulting firm Milliman, said prescription-drug price increases have been lower than overall medical-price increases since the November 2003 passage of the Medicare Modernization Act, which created the Medicare drug benefit.

Consumer medical care costs reflected in the consumer price index rose 4.7 percent, while prescription drug prices climbed 4 percent during the period between November 2003 and December 2004, the study said.

Additionally, AARP reported that generic prescription-drug prices rose 0.5 percent in 2004.

Of the 75 generic prescription drugs covered in the study, three posted price decreases last year. Those drugs were Trimox, Omeprazole and Pacerone.

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