Advocacy groups disagree on prescription drug price rise

WASHINGTON — Prescription drug price increases have been lower than overall medical price increases since the Medicare Modernization Act was passed, according to a pharmaceutical industry association. But the country’s largest retiree association claimed that the average increase in the price manufacturers charge for brand name prescription drugs has “significantly outpaced inflation” for five straight years.

The AARP said in its Watchdog Report that the average price increase for brand name drugs during 2004 was 7.1%. “Compared to the 2004 general inflation rate of 2.7%, the price hikes are the biggest 1-year increase levied by brand name manufacturers in any of the past 5 years,” the AARP said in a press release.

The Pharmaceutical Research and Manufacturers of America (PhRMA) said the AARP study was “misleading” on two counts. “First, it compares brand-name drug prices with general inflation, rather than medical inflation,” the group said. This would be similar to comparing soda prices to the general economy instead of comparing them with the prices of other soft drinks, the group said. Using PhRMA’s analysis, prescription drug prices rose 4%, while other medical services rose 4.7%.

PhRMA based its numbers on the consumer price index, “which is the most accurate measure for what consumers actually pay,” said Lori Reilly, the association’s deputy VP for policy and research.

AARP said it wants Congress to put pressure on the drug industry to lower prices or stop opposing re-importation of prescription drugs from Canada.