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Health Care Reform:

Health Insurance & Affordable Care Act

AARP Reports Rise in Prices; Drug Industry Disputes Group's Numbers

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Brand-Name Prescription Drug Costs Up

March 5, 2008 -- The cost of brand-name prescription drugs rose again in 2007, according to the advocacy group AARP. But the prescription drug industry says AARP's numbers miss the mark.

The AARP Public Policy Institute's latest Rx Watchdog Report tracks the prices that manufacturers charge wholesalers for 220 brand-name (not generic) prescription drugs commonly used by people enrolled in Medicare Part D, which is Medicare's drug plan.

The report shows a 7.4% rise in the price that manufacturers charge to wholesalers for those drugs. That's a steeper increase than the 7.1% rise reported by the AARP for 2006.

"When pharmaceutical companies raise wholesale prices, consumers are ultimately stuck with the bill," John Rother, AARP public policy director, says in a news release.

The prescription drug industry takes a different view.

"AARP's numbers simply do not reflect the true amounts that seniors pay for their medicines. And they do not reflect the clear downward trend in prescription drug price growth," Ken Johnson, senior vice president for the Pharmaceutical Research and Manufacturers of America (PhRMA), says in a news release.

Johnson notes that in 2007, the rate of growth in prescription drug prices slowed by 1.8 percentage points. In other words, prescription drug prices are rising, but not as quickly as in the past.

(How do you save on your medications? Share with others on WebMD's Saving Money the Healthy Way board.)

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