Full access
Health Care Economics
Published Online: 7 December 2007

Prescription Drug Cost Increases Far Outpace U.S. Inflation Rate

Rich DalyAuthors Info & Affiliations
Publication: Psychiatric News
Volume 42, Number 23
https://doi.org/10.1176/pn.42.23.0012a
The cost of prescription drugs rose at rates higher than the rate of inflation from 2000 to 2005, which made prescription drug costs among the fastest-growing in health care, according to a federal tracking report released in October.
A congressionally mandated report by the Government Accountability Office (GAO) tracked the “usual and customary” prices for 122 of the most-prescribed medications dispensed by pharmacies in New York and Pennsylvania. The report found a 4.3 percent average annual increase and a nearly 14 percent increase in overall prices between January 2004 and January 2007. The report also tracked a narrower group of drug prices from 2000 to 2007.
The drug price increases outpaced a common inflation measure during the period. The GAO cited nationwide data from the Bureau of Labor Statistics that found that from January 2004 to January 2007 prices of all common consumer goods for urban consumers—known as the Consumer Price Index (CPI)—increased by an average of 9.3 percent, or 3.0 percent annually.
The drug price increases were thought to be a large component of increases in overall health care costs, which rose by 6.9 percent in 2005, the most recent year for which the Centers for Medicare and Medicaid Services has data.
Significantly, the GAO report found divergent trends among brand-name and generic drugs. So-called “usual and customary” prices decreased among the 57 generic drugs tracked and increased for the 65 brand-name drugs. Specifically, the generic drug prices decreased by an average of 12.8 percent between 2004 and 2007, or 4.5 percent annually, while the brand-name drug prices increased by an average of 21 percent, or 6.6 percent annually.
The findings reflect those of previous drug-price analyses, including an August 2005 GAO report that found a 30-day supply of the 96 drugs most commonly prescribed under a large federal-worker insurance program increased by nearly 25 percent between January 2000 and December 2004.
When the GAO researchers also updated their previous study on the narrower group of medications to include data through January 2007, they found prices for the brand-name drugs increased 48.6 percent, or 5.8 percent annually (see chart).
“Prescription Drugs: Trends in Usual and Customary Prices for Drugs Frequently Used by Medicare and Non-Medicare Health Insurance Enrollees” is posted at<www.gao.gov/cgi-bin/getrpt?GAO-07-1201R>.▪

Information & Authors

Information

Published In

Go to Psychiatric News
Psychiatric News
Volume 42 • Number 23 • December 7, 2007
Pages: 12

History

Published online: 7 December 2007
Published in print: December 7, 2007

Notes

Prices for the 122 drugs most commonly prescribed rose nearly 14 percent between 2004 and 2007, soundly beating inflation.

Authors

Details

Metrics & Citations

Metrics

Citations

Export Citations

If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.

For more information or tips please see 'Downloading to a citation manager' in the Help menu.

Format
Citation style
Style
Copy to clipboard
Tips for downloading citations

There are no citations for this item

View Options

View options

Get Access

Login options

Already a subscriber? Access your subscription through your login credentials or your institution for full access to this article.

Personal login Institutional Login Open Athens login

Not a subscriber?

Subscribe Now / Learn More

PsychiatryOnline subscription options offer access to the DSM-5-TR® library, books, journals, CME, and patient resources. This all-in-one virtual library provides psychiatrists and mental health professionals with key resources for diagnosis, treatment, research, and professional development.

Need more help? PsychiatryOnline Customer Service may be reached by emailing [email protected] or by calling 800-368-5777 (in the U.S.) or 703-907-7322 (outside the U.S.).

Media

Figures

Other

Tables

Share

Share

Share article link

Share

×

As described within the American Psychiatric Association (APA)'s Privacy Policy and Terms of Use, this website utilizes cookies, including for the purpose of offering an optimal online experience and services tailored to your preferences. Please read the entire Privacy Policy and Terms of Use. By closing this message, browsing this website, continuing the navigation, or otherwise continuing to use the APA's websites, you confirm that you understand and accept the terms of the Privacy Policy and Terms of Use, including the utilization of cookies.