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Prescription-drug prices on the rise

AARP finds costs up 41.5% in 5 years -- 3 times the rate of inflation. The industry faults the report for excluding generics.

By Teresa Mears Aug 25, 2010 12:56PM

This won't be a surprise to anyone who regularly fills a prescription: The price of name-brand drugs has risen 8.3% in the past year, far faster than the rate of inflation.


In a report (.pdf file) that looked at prices over five years, AARP found that prices for 207 name-brand drugs commonly taken by Medicare beneficiaries had increased 41.5% since 2004, compared with an inflation rate of 13.3%.


For people who take more than one prescription drug to treat chronic conditions, the impact can be substantial. A patient who regularly takes three name-brand drugs would have paid nearly $1,900 a year more in 2009 than in 2004. The report looked at retail prices of drugs, and many patients with insurance pay less.


Industry officials challenged AARP's finding, telling The New York Times that the AARP report doesn't reflect the widespread use of generic drugs. A U.S. government study of all drug prices, conducted for the Consumer Price Index, found that drug prices overall rose 3.4% in 2009. About 75% of all prescriptions in the United States are now generics, the Times reported. Post continues after video.

John A. Vernon, an assistant professor of health policy at the University of North Carolina who has done consulting work for drug companies, said an equitable survey of drug prices needs to include generics. He told the Times:

It can easily be shown that branded prices are higher here than they are in other countries, but we have the lowest and the most competitively priced generic drugs in the world, and the generic share is going up rapidly. Just focusing on brands, I think, is unfair.

For consumers who are taking the name-brand drugs, the cost can be high. Look at these numbers extracted by the Times on daily costs of popular drugs in 2009, compared with prices a year ago:

  • Nexium (acid reflux): price up 6%, to $5.40 a day.
  • Plavix (anti-blood-clot): up 8.8%, to $5.06 a day.
  • Prevacid (acid reflux): up 7%, to $5.50 a day.
  • Protonix (acid reflux): up 6.8%, to $4.21 a day.
  • Lipitor (cholesterol): up 4.1%, to $4.03 a day.

And here's the five-year increase in prices for six widely prescribed drugs, taken from the report:

  • Nexium (acid reflux): up 28%.
  • Lipitor (cholesterol): up 24%.
  • Aricept (Alzheimer's): up 41%.
  • Fosamax (osteoporosis): up 21%.
  • Advair Diskus (asthma inhaler): up 42%.

The highest percentage increase was for Flomax, used to treat men with enlarged prostates, which went up 92% in five years. It sells for $4.42 a pill at, and the generic is $3.63 a pill, the Times reported.

A recent Consumer Reports survey found that 27% of people reported not taking prescriptions as directed in an effort to save money. That includes such tactics as skipping doses, splitting pills, not getting prescriptions filled, taking expired drugs or sharing prescriptions. The same survey found that patients believe pharmaceutical companies have too much influence on their doctors.


If you're wondering whether a generic might be a better choice for you than a name-brand drug, Consumer Reports has some recommendations on drugs that are the best value.  For acid reflux, for example, it says the generic over-the-counter medications work just as well as the more expensive name-brand prescription versions.

Wal-Mart, Target and some supermarkets offer some generic drugs for $4. Ordering by mail, finding coupons and rebates online, and asking your doctor for samples are ways to get prescription drugs for less.


Are you finding the price of prescription drugs for you and your family prohibitive? Have you sought ways to cut back on costs, such as taking a drug less often than prescribed or splitting pills?


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