US drug price rises nearly double inflation rate, claims AARP

A look at US retail prices for a combined set of widely used prescription drugs finds the cumulative change in prices from 2005 through 2009 was almost double the rate of inflation. The not-for-profit organization AARP Public Policy Institute (PPI) examination of widely used drugs - brand name, specialty and generic - found that even with substantial decreases in the prices of generic drugs, the average annual cost of drug therapy continued to rise.

According to the report, retail prices for the 469 prescription drug products that have been on the market since the end of 2004 have increased by 25.6% from 2005 through 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.

In 2009, the annual average rate of increase for these drugs was 4.8% while rate of general inflation was -0.3%. When broken down further, the findings show that the retail prices for brand name and specialty drug products rose by 8.3% and 8.9% respectively in 2009. In contrast, retail prices for generic drugs decreased by 7.8%.