Information and Resources

AARP: Prescription Drug Prices Up

March 6, 2007 -- Prescription drug prices soared nearly twice as high as inflation last year, the AARP announced today.

But a drug industry trade group calls the AARP report "inaccurate and misleading."

The AARP reports a 6.2% rise in the manufacturer list price for the brand-name prescription drugs studied. That's almost double America's general inflation rate of 3.2% in 2006.

That translates to a rise of nearly $272 in 2006 in drugs costs for the typical older American, who takes four prescription drugs, says the AARP, assuming that only brand-name drugs are used and that the full price increase is passed on to the consumer.

However, the Pharmaceutical Research and Manufacturers of America (PhRMA) says government data put prescription drug inflation at 1.5% for 2006, with slowing growth in prescription drug prices.

AARP's Calculations

The AARP report covers 193 brand-name prescription drugs and 75 generic prescription drugs commonly used by adults aged 50 and older, according to AARP Pharmacy Service Data.

The report only tracks manufacturer list price. That's the price drugmakers set for wholesalers and other direct drug purchasers, not counting rebates. It's not necessarily what you pay at the pharmacy.

The AARP analyzes manufacturer list prices for prescription drugs quarterly. The new report sums up the AARP's analysis for 2006.

Top 10 Increases

The AARP report includes a list of the 10 brand-name prescription drugs with the highest rise in manufacturer list price.

Here is that list, along with the percentage increase in the manufacturer list price.

1. Ambien 5 milligrams (mg): 29.7%
2. Combivent 120-20 micrograms per spray (mcg/act): 18.3%
3. Atrovent Inhaler 18 mcg/act: 16.9%
4. Wellbutrin 150 mg: 16%
5. Clarinex 5 mg: 15.8%
6. Flovent 110 mcg/act: 14.6%
7. Ambien 10 mg: 14.5%
8. Flomax 0.4 mg: 13.4%
9. Serevent Disk 50 mcg: 13%
10. Serevent 21 mcg/act: 13%

Generic prescription drugs dropped 2% in their manufacturer list price in 2006, according to the AARP.

Drug Industry Responds

WebMD contacted PhRMA for its comments on the AARP report. PhRMA replied with a statement from Ken Johnson, PhRMA's senior vice president.

"AARP's allegations about pharmaceutical inflation are inaccurate and misleading," Johnson says in the statement.

He cites Medicare data showing that increases in prescription medicine spending have slowed for six consecutive years and are at their lowest level in a decade.

"In addition, publicly available data from the federal government's Bureau of Labor Statistics show that prescription drug prices increased only 1.5% from January to December of 2006, well below the 3.3% increase for all medical care last year," Johnson says.

It's not clear whether that government figure -- 1.5% -- is based on the same drugs and manufacturer list prices as in the AARP report.

"Expert data strongly suggest that AARP's numbers simply do not reflect the true amounts paid by seniors for their medicines," Johnson says. "And they do not reflect the clear downward trend in prescription drug price growth."