New Report Shows the Prices of Prescription Drugs for Seniors

Medicare Discount Cards Begins Next Week, But Overwhelming

Washington, DC - The prices of the top 30 brand-name drugs prescribed for seniors rose by 4.3 times the rate of inflation last year, according to a report released today by Families USA, the national organization for health care consumers. The report was issued only days before the new Medicare drug discount card program begins. However, the report shows that, even after the program is fully implemented, most seniors will pay much higher prices this year than they have paid in previous years.

Based on the Bush Administration's estimates, approximately 7.4 million seniors - only 1 out of every 6 people enrolled in Medicare - will participate in the new drug discount card program. As a result, 5 out of 6 seniors will bear the full brunt of the fast-rising drug inflation documented in the report.

"The overwhelming majority of seniors will receive no help this or next year from skyrocketing drug prices, and their medicines will be much more unaffordable," said Ron Pollack, Families USA's Executive Director. "For those who get discounts, potential savings will be negated by large increases in base prices."

According to the report, the average wholesale price of 28 of the top 30 brand-name drugs rose by 2 or more times the rate of inflation from January 2003 to January 2004. Twenty-one of those drugs rose in price by 3 or more times the rate of inflation, and almost half (14) rose by more than 5 times inflation. The top 5 brand-name drugs prescribed for seniors rose especially quickly:

• Lipitor, used to lower cholesterol, rose 5.5 times inflation.
• Plavix, used to prevent blood clots, rose 5.3 times inflation.
• Fosamax, used to treat patients with osteoporosis, rose 4.6 times inflation.
• Norvasc, used to treat high blood pressure, rose 6.6 times inflation.
• Celebrex, used to treat arthritis and joint pain, rose 5.4 times inflation.

"Congress and the President could have provided real drug price relief for all seniors had they allowed Medicare to bargain for lower prices, like the Department of Veterans Affairs does for veterans, and had they allowed seniors to purchase cheaper drugs from Canada," said Pollack. "Instead, most seniors will experience even more cost pain without the benefit of a palliative." [See comparison chart.]

According to the Administrator of the Centers for Medicare and Medicaid Services, seniors enrolled in the new discount card program will experience brand-name drug discounts ranging from 11 to 17 percent. However, according to the Families USA report, during the past three years (from January 2001 to January 2004), the base price of the top 30 brand-name drugs rose, on average, by almost 22 percent. Lipitor, the top-selling drug for seniors, rose by 27.0 percent in that period. Plavix, the second most prescribed drug, rose by 34.8 percent.

During the past year, the brand-name drugs that rose fastest were:

• Combivent, marketed by Boehringer Ingelheim and used to treat chronic asthma, rose 13.2 times inflation.
• Alphagan P, marketed by Allergan to treat glaucoma, rose 10.3 times inflation.
• Evista, marketed by Eli Lilly to treat osteoporosis, rose 10.3 times inflation.
• Diovan, marketed by Novartis to treat high blood pressure, rose 8.6 times inflation. 
• Detrol LA, marketed by Pfizer to treat overactive bladders, rose 8.5 times inflation.
• Xalatan, marketed by Pfizer to treat glaucoma, rose 6.8 times inflation.

The Families USA report was compiled from data provided by the Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE) program, the largest outpatient prescription drug program for older Americans in the United States. Using PACE claims for 2003, Families USA identified the 30 top selling brand-name drugs used by seniors.

In calculating changes in drug prices, Families USA examined the "Average Wholesale Price" (AWP). It is the single best measure for reviewing price changes and is used by different payers and discount vendors when negotiating with drug manufacturers. It is often the base from which consumer discounts are calculated. Changes in AWP signal changes in base prices charged to insurers and other payers and changes in the price from which discounts are calculated.

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org