Health Insurance Daily

Generics Stay Flat While Brand Prices Grow

Brand-name pharmaceutical costs have escalated rapidly, while generic prices haven't moved much, revealing an opportunity for companies to cut medical bills by encouraging use of generics.

Manufacturer prices for 193 brand-name drugs jumped an average of 6.1% from July 2004 to June 2005, according to a new report from the AARP, the advocacy group for older Americans.

The second quarter 2005 average price increase for those drugs was 0.9%. In contrast, manufacturer prices for 75 generic drugs remained unchanged during that time frame.

Price hikes varied by manufacturer and therapeutic category. Treatments for hypertension and osteoporosis tended to have steeper price increases than other drug classes. Fifty-eight drugs showed increases of more than 5% during the first two quarters of 2005, AARP reports.

Ken Johnson, spokesman for the drug-maker lobby PhRMA, criticizes AARP for using wholesale acquisition costs, rather than the consumer price index, noting, "The U.S. government’s publicly available consumer price data over the past few years clearly show that prescription drug prices increased at rate slower than overall medical care."

Article provided by Benefit News, November 3, 2005.

posted by Mike @ 10:35 AM