Drug Prices Climb Faster Than Inflation, Again

The relentless rise in brand-name drug prices is getting to be a sad, familiar song.

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Last year, the average retail price for brand-name medicines popular with Medicare patients rose 8.3 percent, according to the latest analysis performed for the AARP.

That's the biggest jump in the last five years. And it's all the more dramatic when you compare the price action for prescriptions with those for other goods and services. Inflation was nonexistent in 2009, with consumer prices falling by about a third of a percent.

The retail cost of a year's worth of treatment with the most commonly used brand-name drugs was $1,382 in 2009, up from $1,286 the year before.

Prices went up for all of the top 25 medicines AARP looked at. A few had big jumps.

The retail price of Flomax, a drug for enlarged prostates, went up nearly 25 percent to about $4 a day. But there may be some price relief for patients taking the medicine in 2010. The Food and Drug Administration approved generic versions of the medicine, tamsulosin, in April. Costco sells the copycat version for less than $1 a day.

Drugmakers often raise prices steeply just before a medicine faces generic competition. So it was with Aricept for Alzheimer's in 2009. The drug's retail price went up 10.8 percent last year. In December, the FDA approved generic Aricept, or donepezil. The knockoff version is expected to be available late this year, after patent protection for the brand-name version expires this fall.

We asked PhRMA, the trade group for brand-name drugmakers, for comment on the AARP report. "Independent and government data continue to show prescription medicines represent a small and decreasing share of growth in overall health care costs in the United States," PhRMA said in a statement.

The group notes that overall prices of prescription medicines, as measured in the Consumer Price Index, "have risen in line with medical inflation." But that doesn't exactly contradict the AARP's analysis because the CPI looks at generics, which now account for about 70 percent of prescriptions, and brand-name drugs, something PhRMA acknowledges.