Brand-Name Drug Prices Spiral Out of Control
April 29, 2006
Prices for brand-name drugs rose 6 percent in 2005, far outstripping the pace of inflation. Even so, this was the smallest increase since 2001. Prices for generic drugs, on the other hand, fell in both 2004 and 2005, dropping nearly 1 percent last year.
The numbers come from a review of prices for almost 300 widely used brand-name and generic drugs. Industry representatives have criticized the numbers as only being wholesale costs, which do not reflect the discounts often granted by drugmakers to pharmacies or insurers.
Passed on to Patients
The AARP (American Association of Retired Persons), which produced the report, counters that wholesale prices are passed through to patients, and are often the starting point for negotiations on final costs.
The AARP is campaigning for Congress to give Medicare officials the authority to negotiate for lower prices, and to allow consumers to import lower-cost drugs from other countries.