US drugmakers have rejected new claims that, even with big declines in generic drug prices, the average annual cost paid by seniors for their prescription drug therapy increased more than $1,000 during 2005-2009.
In 2009, the average annual rate of increase in the retail prices of the 514 prescription drugs most used by enrollees in Medicare - the US federal health programme for seniors and some disabled people - was 4.8%, while the rate of general inflation was -0.3%, according to the seniors advocacy group AARP.
Moreover, during the year the retail prices of brand-name drugs rose 8.3% and those of specialty drugs were up 8.9%, while retail prices for generic drugs decreased 7.8%, says the analysis, which has been produced by the AARP's Public Policy Institute (PPI).
The PPI also reports that retail prices for the 469 prescription drugs that have been on the US market since the end of 2004 increased 25.6% during 2005-2009, compared with a general inflation rate of 13.3%. For consumers taking a drug on a chronic basis, their average annual cost of therapy rose from $2,160 to $3,168 over the same time period, it says.
However, the Pharmaceutical Research and Manufacturers of America (PhRMA) says the AARP report is "misleading," that it "ignores key facts" and "paints an inaccurate picture of prescription drug spending in the US."
"Unlike what AARP suggests, numerous sources clearly show that in recent years, drug costs have been growing at historically slow rates," said PhRMA senior vice president Matt Bennett. "In fact, government data show that in 2010, retail drug spending grew by just 1.2%, the slowest rate of growth on record," he added.
He points out that while AARP acknowledges that many brand medicines in its analysis have a generic version available, its findings count every prescription as if it was filled with a brand medicine, even when most patients fill the prescription with a generic. "As a result, the AARP studies completely miss the substantial savings that patients experience when a generic substitute becomes available," says Mr Bennett.
The cost of medicines commonly used by seniors has decreased, not increased, he says; for the top 10 therapy areas in the Medicare prescription drug programme (Part D), the average cost per day fell from $1.50 in 2006 to $1.00 in 2010, and is projected to further decline to $0.65 by 2015.
- An examination this month by US Government Accountability Office (GAO) of research on savings associated with generic drug use reports that on average, the retail price of a generic is 75% lower than that of a brand-name drug. Also, before the passage in 1984 of the Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman), which facilitated earlier and less costly market entry of generic drugs, the generic utilisation rate was about 19%, while today it is around 78%.
"The generic utilisation rate is expected to continue to grow over the next few years as a number of blockbuster drugs come off-patent through 2015," says GAO.