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Seniors and Drug Industry Fight Over Prices

Posting Date: 04/25/2005

Americans are cynical about statistics. They know that numbers can be tortured to tell tales. Two new studies on the cost of prescription drugs illustrate the problem.

One was announced by PhRMA, the Pharmaceutical Research and Manufacturers of America. This trade organization represents most major drug companies.

The industry reports, ?Prescription drug price increases have been lower than overall medical price increases.? Lumping brand-name and generic drugs together, drug prices rose 4 percent last year. The inflation index of consumer medical costs for the same time frame was 4.7 percent.

The comparison is supposed to make prescription medicine look like a bargain.

It has been presented as a response to a study from AARP.

Numbers from the powerful senior lobby tell a different story. According to the AARP, the manufacturers? wholesale prices for brand-name prescription drugs soared 7.1 percent last year. But generic drug prices rose less than 1 percent. General inflation ran approximately 2.7 percent in 2004.

From the AARP perspective, brand name pharmaceuticals don?t look like such a good deal. According to its analysis of 150 popular products, these brand name drugs have risen an average of 35 percent since 1999. That?s almost three times higher than overall inflation during that time (13.5 percent).

However the numbers get crunched, consumers are paying more for their medicines. The popular sleeping pill Ambien, which is advertised directly to consumers, jumped 11.9 percent last year. A month?s supply could cost about $100, more than $3 per pill.

The price of your medicines might give you a migraine, but treating it will be pricey. Imitrex, one of the most successful migraine medications, can run $20 a tablet.

When challenged about such prices, the industry always responds that it has to charge a lot to cover research and development costs. If Americans want better medicines in the future, they have to pay now.