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50+: Live Better, Longer

AARP: Brand-Name Prescription Drug Prices Up

Pharmaceutical Trade Group Calls the Numbers 'Fuzzy Math'
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WebMD Health News

Aug. 16, 2005 -- A new AARP report shows a rise in brand-name prescription drug prices for the year ending in March 2005. But the numbers need a little explanation.

The figures don't exactly track what you pay at the pharmacy. Instead, they focus on prices listed by drugmakers for wholesalers. That may not be the same as what people pay.

In a news release, Ken Johnson, senior vice president for the industry trade group PhRMA (Pharmaceutical Research and Manufacturers of America), called the AARP's numbers "fuzzy math." The tit-for-tat over drug prices is nothing new. The same two groups dueled over drug price statistics in April.

Resources for Seniors

Medicare-approved drug discount cards are one option for seniors. Medicare's prescription drug plan goes into effect in January 2006. Drug companies may also have programs to help cover costs for disadvantaged patients.

When generic versions of drugs are available, they may be more affordable. Prices of generic drugs commonly used by seniors rose less than 1% in the year ending in March, according to the AARP's report.

AARP's View

The latest AARP report covered 195 brand-name drugs commonly used by older Americans, according to the AARP's Pharmacy Service.

The report showed that brand-name drug prices were up 6.6% for the year ending in March 2005. That's more than double the general inflation rate (3%), but it's lower than the 7.1% rise in brand-name drugs for the year ending in December 2004, states the AARP.

What does that mean to someone buying those drugs? If those prices were totally absorbed by someone who takes three of those drugs daily, they would have paid an average of $144.15 more for those drugs in the first quarter of 2005, compared to a year earlier, states the AARP.

Trade Group's View

According to PhRMA, the AARP's report is misleading. "Their numbers simply do not reflect the true amounts paid by seniors for their medicines," states Johnson.

"The U.S. government's publicly available consumer price data over the past few years clearly show that prescription drug prices increased at a rate slower than overall medical care, which is good news for consumers. And beginning in January, America's seniors will get large savings on medicines by enrolling in Medicare's new prescription drug insurance program," Johnson continues.

Expect the debate to continue because the AARP is doing an ongoing series of drug price reports.

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