To The Moon! Rx Prices Keep Rising
2 CommentsBy Ed Silverman // March 6th, 2007 // 1:50 pm
To celebrate the end of the first full year of the new Medicare drug benefit, AARP has issued its latest Watchdog report. AARP, by the way, doesn’t like the plan. Here are some of the findings:
* The average annual increase in manufacturer prices of the most widely prescribed brands used by Americans who are 50 years and older rose 6.2 percent last year, compared with 6 percent the year before and 7.1 percent in 2004. The inflation rate was 3.2 percent last year.
* The average annual change in the cost of therapy due to manufacturer price changes for most widely prescribed drugs used by older Americans for chronic conditions was $67.96 last year, compared with $47.43 the year before;
* Of the 196 most widely prescribed brand drugs, prices for 119 rose more than 5 percent last year, and 177 had price increases that exceeded the 3.2 percent inflation rate. In addition, prices were raised on 33 drugs twice last year;
* The drug with the biggest price hike: Ambien 5mg rose 29.7 percent.
“Over time escalating drug prices will make Medicare drug plans unaffordable for older Americans,” says David Sloane, AARP’s senior managing director for government relations and advocacy. “One way to address high drug prices is to take full advantage of Medicare’s bargaining power and allow Medicare to negotiate lower drug prices.”
You can read the full report here.
[tags]AARP, Ambien, Medicare, Prices[/tags]
Morris Lewis
Interesting that AARP doesn’t like the plan since it supported Part D when it was passed. Also, looking at list prices doesn’t really tell the correct story. Less than 10% of pharmaceutical sales is at full retail. Most purchasers of pharmaceuticals have coverage through plans that negotiate quite effectively, gaining concessions from both manufacturers and pharmacies. Thus, the purchaser either pays a copay or coinsurance that is substantially lower.
For manufacturers, although list prices are rising rapidly, net prices are rising at a substantially lower rate. AARP, of course, has its own political agenda that includes government price controls and importation. Thus, its bias is toward exaggerating pharmaceutical costs.
ed
Hi Morris,
Thanks for writing and good points,all.
For whatever reason, the AARP fellow does appear critical, doesn’t he? Perhaps they support Medicare D concept, but want it both ways, so they can continue criticizing. It is an interesting remark.
And these prices are for the folks who pay full price, of course. One who has coverage, presumably, would recognize that. I hope.
Lastly, I agree with you that AARP has an agenda. Most organizations do. Which is fine. I simply put this out there as I did, because the results are fresh, not because it should represent the last word.
ed