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AARP Study finds Popular Brand-Name Drug Prices far outstrip inflation, Brand Name Drug Retail Prices Skyrocketing

WASHINGTON, August 2010—AARP’s first-ever analysis of retail price trends of prescription drugs finds prices for widely used brand name drugs skyrocketed in 2009, climbing more than eight percent even as general inflation remained negative.  The AARP Rx Price Watch report findings align with the Association’s earlier Rx Watchdog reports, which found similarly large increases in manufacturer prices for brand name drugs.

Related Story: Drug Prices up in 2009

The brand name drug industry has criticized AARP’s past drug pricing reports for analyzing manufacturer list prices that do not reflect discounts and rebates often provided by drug makers.  However, the new Rx Price Watch report indicates that such discounts do little to protect consumers from growth in brand name prices.  While manufacturer prices for widely used brand name drugs increased 9.3 percent in 2009, retail prices for the same drugs climbed nearly as quickly at 8.3 percent.

“For the first time, we know that brand name drug retail prices are growing just as quickly as manufacturer prices,” said AARP Executive Vice President John Rother.  “These are increases that hit the wallets of every American, whether through their own health care bills or the costs of programs like Medicare and Medicaid.”

All but six of the 217 brand name prescription drugs studied by AARP had retail price increases exceeding general inflation last year.  Each of the top 25-selling brand name drugs had price increases, with most jumping more than five percent.  Prostate drug Flomax (0.4 mg capsules) saw the largest increase in this top-selling group, climbing 24.8 percent during 2009.  Flomax first began facing generic competition in early 2010.

Among brand name manufacturers, products of two drug makers—Boehringer Ingelheim and BTA Pharmaceuticals—had average increases of over 15 percent among the drugs studied by AARP.  Notably, manufacturers Merck, Allergan and Alcon had average increases of less than five percent.

Rother added: “Prescription drugs improve the lives of millions of Americans.  But unless something is done to bring down their skyrocketing price increases, life-saving medicines will be out of reach for too many.  The health care law made some progress by closing the Medicare doughnut hole, but Congress and the industry must bring more competition and transparency to the marketplace.”

AARP is working to lower prescription drug costs and create more competition in the marketplace.  The health care law enacted earlier this year will begin closing the gap in Medicare drug coverage in 2011 and provide people who fall into the gap this year with an extra $250 to help pay for their drug costs.  The Association has also called on lawmakers to allow for the safe and legal importation of prescription drugs from abroad, bring generic versions of biologic drugs to market faster and allow Medicare to negotiate prescription drug prices directly with drug makers.

AARP’s Doughnut Hole Calculator can help people in Medicare’s Prescription Drug Program find lower cost drugs that can save them money and keep them out of Medicare’s dreaded coverage gap.  The calculator, available at www.aarp.org/doughnuthole, finds available options based on their current prescriptions and creates a customized letter to help people start a conversation with their doctor about switching to safe, lower cost drugs.

The list of prescription drugs analyzed in the AARP Rx Price Watch report is based on the drug products most widely prescribed to people in Medicare Part D.  Price changes are measured using retail prices as reported by the Thomson Reuters MarketScan® Research Databases.

For a complete copy of the AARP Rx Price Watch report, visithttp://www.aarp.org/health/drugs-supplements/info-08-2010/rx_price_watch.html.

AARP is a nonprofit, nonpartisan organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. 

AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates.  We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA su Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, www.AARP.org. 

AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors.  We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.