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Drug prices for elderly climb 50 percent { July 1 2004 } Original Source Link: (May no longer be active)    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/07/01/BUG297EMDH1.DTL http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/07/01/BUG297EMDH1.DTL Drug prices climb Increases outpace inflation: AARP - Victoria Colliver, Chronicle Staff Writer Thursday, July 1, 2004 Prices of drugs commonly used by people older than 50 increased far faster than inflation in the first quarter of the year, a period just after President Bush signed the Medicare drug benefit law, according to a study released Wednesday by the AARP. The study found that prices drugmakers charged to wholesalers for the 197 brand-name medications used most frequently by older Americans rose 3.4 percent during the three-month period ending March 31, much higher than the 1. 2 percent annual inflation rate registered during the same period. While the study doesn't specifically claim that drugmakers raised prices in anticipation of the Medicare benefit, AARP officials noted that prices continued climbing after the new law was enacted. The latest increases put 2004 on track for the fastest rise in drug prices in the past four years, they said. "This is a four-year trend of ever-accelerating price increases that did not abate as we thought it might once the Medicare drug benefit was enacted," said John Rother, AARP's policy director. "This is bad news not only for seniors, but for everyone who pays health premiums and buys prescription drugs, " he said. Rother said he had hoped the prospect of increased business generated by the Medicare benefit would encourage manufacturers to curb price increases. The rise in the cost of medications during the first three months of 2004 was similar to price increases that took place before enactment of the Medicare drug benefit, AARP's data show. During the first three months of 2003, manufacturers' prices rose 3 percent, compared with an overall annual inflation rate of 1.3 percent. The highest recent quarterly increase occurred in the first quarter of 2002, when drug prices rose an average of 3.6 percent, AARP said. The largest price hikes during the first three months of the year were 9. 9 percent for a pain medication called Duragesic, 9.5 percent for cholesterol- lowering Lescol and 9.4 percent for inhalers Combivent and Atrovent, according to the AARP report. Two drug manufacturers, Pfizer and Bristol-Myers Squibb, had 12 of the top 25 selling drugs in the study, and all reported price increases. The price of Pfizer's popular cholesterol-lowering drug, Lipitor, rose by 2.9 percent or 4.6 percent, depending on the dosage. Bristol-Myers Squibb's Plavix, a blood thinner, increased 7.9 percent in price. Pfizer did not return a phone call, and a spokesman for Bristol-Myers Squibb referred a reporter to Pharmaceutical Research and Manufacturers of America, or PhRMA, the trade group for the pharmaceutical industry. The trade group said that drug prices have increased at an equal rate to other health care services since the Medicare bill was signed into law in December. The first stage of the drug benefit, which officially begins in 2006, has been the introduction on June 1 of the Medicare discount drug card that Bush administration officials say gives seniors discounts averaging 11 to 18 percent. "We urge the AARP to put aside the politics of the moment and to turn its efforts to signing up as many seniors as possible for the Medicare-endorsed discount cards," Richard Smith, PhRMA's vice president of policy, said in a statement. The AARP came out in support of the new Medicare prescription drug benefit, a position that was controversial among many of its members. The new law has been widely criticized by consumers and others who say it does not offer meaningful discounts and may create gaps in coverage. Families USA, a consumer group that has been critical of the Medicare drug law, released a similar study in June that found prices for 30 brand-name drugs commonly used by seniors rose 4.3 times the rate of inflation last year. "We've got this drug discount program, and the base price keeps on rising, " said Ron Pollack, head of Families USA. "This new drug discount card is the equivalent of a used car salesman offering a $3,000 discount after they jacked up the sticker price $4,000 before you walked into the showroom." Tricia Neuman, vice president with the Henry J. Kaiser Family Foundation, said while it's difficult to make the connection between rising prices and the Medicare benefit, the effects are clear. "It makes it more difficult for consumers to realize real drug savings as a result of the discount drug card because the discounts may not be keeping pace with rising prices," she said. E-mail Victoria Colliver at vcolliver@sfchronicle.com. Page C - 1

6 democratic candidates attack medicare measure { November 19 2003 } Aarp members burn cards Aarp spends 7m ad campaign supporting gop bill { November 19 2003 } Candidates take on aarp over drug bill Congressman bribed to pass medicare { November 27 2003 } Democrats threaten sue over medicare cost estimates Drug makers protect their turf { November 21 2003 } Drug plan faces enrollment challenge Drug prices for elderly climb 50 percent { July 1 2004 } FDA and states at odds over drugs { February 22 2004 } House probe medciare bribery allegation Medicare administrator withheld cost estimates for congress { September 8 2004 } Medicare costs kept secret Medicare drug benefit will cost more than reported { February 9 2005 } Medicare drug bill could be tough sell { November 17 2003 } Medicare drug cards produce confusion { July 29 2004 } Medicare drug cost estimate increases { January 30 2004 } Medicare reform bill is a disaser { November 28 2003 } Medicare secrecy inquiry is silenced { April 2 2004 } Medicare wont cover cancer drug costs { September 8 2004 } Medicares hidden bonanza { March 4 2004 } New drug benefits too complicated for seniors Nine dems back medicare bill Offered money to change vote { December 8 2003 } Some experts foresee revolt by elderly { November 26 2003 } Top democrats want us house probe on medicare vote US offers senior drug cards amid criticism { May 3 2004 } Files Listed: 27

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