April 14, 2006
AARP, PhRMA duke it out over Rx-drug pricing numbers
Controversy began to swirl this week over how drastic the rise in prescription drug pricing was during 2005. On Wednesday, AARP issued the results of its annual “RX Watchdog” report, indicating that the price manufacturers charge wholesalers for brand name medications outpaced inflation for the sixth year in a row. The AARP report explained that Rx drug prices grew 6% in 2005, while inflation over those 12 months rose by only 3.4%. According to the AARP report, AstraZeneca’s beta blocker Toprol XL led the pack with the highest price increase at 11.1%. Sanofi-Aventis’ sleep aid Ambien followed with an increase of 10.1%. Proctor & Gamble’s osteoporosis treatment Actonel jumped by 8.1%, the report said. In a statement, PhRMA argued that IMS Health data indicates that retail drug costs grew by only 4% last year. “Instead of looking for new ways to help seniors, AARP, unfortunately, is spending its time looking for new ways to use old, discredited arguments,” charged PhRMA spokesperson Ken Johnson. Additionally, PhRMA argued, AARP employed use of wholesale acquisition cost (WAC) numbers to measure drug prices and, as a result, came up with figures that are deeply flawed. AARP spokesperson Steve Hahn told MM&M that his group stands by its numbers. “WAC gives us the best indication as to what the companies are doing and whether they are holding the line on cost increases. The challenge is there is no real transparency in drug pricing and, for the most part, people don’t understand what happens between the manufacturer and the retail pharmacy,” he said.