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AARP Reports Biggest 12-Month Spike in Brand-Name Drug Prices Since 2002

By John Reichard, CQ HealthBeat Editor

May 17, 2010 -- Manufacturer prices for brand-name drugs widely used by Medicare enrollees rose 9.7 percent in the 12 months that ended in March, the seniors lobby AARP reported Monday.

The increase "was the largest twelve-month spike since AARP began tracking drug prices in 2002," the lobby said in a news release.

Prices for expensive specialty drugs used in the Medicare program rose almost as much—by 9.2 percent—according to AARP. Prices for those drugs, which treat conditions such as multiple sclerosis and cancer, range between $1,000 and more than $20,000 per month, AARP said.

The latest findings, showing nearly a double-digit pricing increase, are not markedly different from AARP data that was previously reported. Rep. Henry A. Waxman, D-Calif., said at a hearing last fall that AARP tracking showed a price increase of 9 percent between October 2008 and September 2009.

AARP noted that general inflation was nearly flat in its latest 12-month tracking period and that generic drug prices widely used by people in Medicare fell 9.7 percent.

But the AARP data "does not take into account discounts and rebates generally negotiated between drug manufacturers and payers," said Ken Johnson, senior vice president at Pharmaceutical Research and Manufacturers of America, which represents brand-name drugmakers. Johnson added that the federal government's Consumer Price Index, "which includes a blend of brand and generic drugs that reflects what consumers actually buy, reveals that since 2000, prescription drug prices have risen in line with medical inflation."

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