AARP says prescription drug prices for those 50+ increased 2x inflation rate

March 7, 2007

For the sixth year in arow, manufacturers’ prices of brand-name prescription drugs rose lastyear at roughly twice the rate of inflation, according to a reportreleased Tuesday. The annual report by AARP, the nation’s largest organization ofAmericans aged 50 and older, found that prices for the 193 drugs mostcommonly used by that age group increased an average of 6.2 percent in2006, while the Consumer Price Index rose 3.2 percent. The pharmaceutical industry called the study “inaccurate and misleading.” Referring to data collected by the federal Centers for Medicare andMedicaid Services and the Bureau of Labor Statistics, the industryargued that increases in prescription drug spending slowed for thesixth year in a row, and that retail prescription prices increased only1.5 percent last year. “Expert data strongly suggest that AARP’s numbers simply do notreflect the true amounts paid by seniors for their medicines. And theydo not reflect the clear downward trend in prescription drug pricegrowth,” said Ken Johnson, vice president of the PharmaceuticalResearch and Manufacturers of America. In its study, AARP reported that since the end of 1999, average drugprices have increased nearly 54 percent, while overall inflation roseabout 20 percent. “Over time, escalating drug prices will make Medicare drug plansunaffordable for older Americans. One way to address high drug pricesis to take full advantage of Medicare’s bargaining power and allowMedicare to negotiate lower drug prices,” said David Sloane, AARP’ssenior managing director for government relations and advocacy.