Prescription Drug Prices Rise Faster Than Inflation

Gerry McGill

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The Associated Press reported on Wednesday, March 5, that drug makers increased their prices last year by an average of 7.4% for the brand-name medicines most commonly prescribed to the elderly, according to the advocacy group AARP. The increase was about 2.5 times overall inflation.

The AARP has been tracking drug prices going back to 2002, focusing on the prices charges to wholesalers. The organization noticed that the price increases
have been slightly greater since the Medicare drug benefit kicked in January 1, 2006.

In the four years before the benefits startup, wholesale prices rose between 5.3% and 6.6% a year.

All but four of the 220 brand-name prescriptions in the study had price increases during 2007. Nearly all exceeded the rate of general inflation. Among the top 25 drug products, the sleep aid Ambien had the largest price increase, 27.7%.