Brand-Name Drug Prices Rise Faster Than Inflation

[Kadie]

Brand-Name Drug Prices Rise Faster Than Inflation

Two Reports Measure Price Increases For Brand-Name Drugs

POSTED: 5:08 p.m. EDT May 25, 2004

WASHINGTON -- Brand-name prescription drug prices rose at more than three times the rate of overall inflation last year, two groups pressing for lower prices said in studies Tuesday.

The reports by the 35 million-member AARP and the consumer group Families USA said the gap between prices for prescription medicines and general inflation has widened in recent years, diminishing the purchasing power of older Americans who receive increases in Social Security based on the Consumer Price Index. The index is the government's most closely watched inflation measure.

"If the price of drugs keeps going up faster than inflation, it will become more and more difficult for consumers, especially older consumers, to be able to afford them," said John Rother, AARP's policy director.

The increases also negate the value of the discounts available through Medicare's new drug cards, said Ron Pollack, president of Families USA. The group has been a persistent critic of last year's Medicare prescription drug law.

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