Trends in Manufacturer Prices of Brand Name Prescription Drugs Used by Older Americans 2000 through 2003                                                         HOME
		Specifically, this report compares price changes with the rate of inflation and from one year to the next. It also presents differences in average price changes by manufacturer and by major therapeutic category. The sample of drugs studied was identified using data from the AARP Pharmacy Service, and changes in prices charged by drug manufacturers to wholesalers were measured using changes in the wholesale acquisition cost (WAC). Some of the key findings are as follows:
		This report presents the results of a study of changes in manufacturers' prescription drug prices (i.e., prices charged to wholesalers) from 2000 to 2003 for the roughly 200 brand name prescription drugs most widely used by Americans age 50+. (The manufacturer's charge to wholesalers is the most substantial component of a prescription drug's retail price.) These historical trends in price change provide a useful point of reference for examining changes in drug prices subsequent to 2003, particularly as the prescription drug provisions of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 are implemented.
			Although the average price increase by brand name drug manufacturers in 2000 was slightly above the rate of general inflation, in 2003, the average price increase was three times the rate of inflation. Among all 197 drugs in the sample, the four-year average annual growth rate in manufacturers' brand name drug prices was 6.0 percent, compared with an average annual general inflation rate of 2.5%. Including only the 155 brand name drugs that were on the market for the entire four-year period results in a December 1999 to December 2003 average cumulative increase of 27.6%, compared with the general inflation rate of 10.4% during the same period.
				The report was written by David J. Gross of the AARP Public Policy Institute, Stephen W. Schondelmeyer of the PRIME Institute of the University of Minnesota, and Susan O. Raetzman of the AARP Public Policy Institute. For more information, please contact David Gross at 202/434-3895. (44 pages)