Report: Drug costs for elderly continue to rise

WASHINGTON (CNN) -- The prices of the 50 prescription drugs most commonly used by the elderly on average rose more than twice the rate of inflation in the year ended January 2001, according to a consumer group report.

The prices increased on average by 6.1 percent, though the rate of inflation excluding energy in that one-year period was 2.7 percent, the report said.

This is not a new trend, according to an annual report issued Tuesday by Families USA. Between January 1996 and January 2001, the prices of prescription drugs most frequently used by seniors rose 22.2 percent on average,. The increase was nearly twice the rate of inflation, which was 12.4 percent over that period.

Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, a Washington-based trade group, disputed the report, saying it implies that all seniors pay the same price for a given drug. Trewhitt said pharmacies sometimes charge double what others do for the same drug.

"Consumers really ought to carefully compare prices," he said.

Because of the volatility of energy costs from year to year, references to inflation in the report are based on the Consumer Price Index less the costs of energy. The report says that using this formula "provides a more stable illustration of inflation" and "protects the comparison between drug prices and general inflation against distortions due to variations in energy costs."

Among the 50 drugs used most commonly by seniors, the following rose most significantly in price between January 2000 and January 2001, according to the report.

•  Synthroid, a synthetic thyroid agent, rose by 22.6 percent, eight and a half times the rate of inflation.

•  Alphagan, used to treat glaucoma, rose 22.5 percent, more than eight times the rate of inflation.

•  Glucophage, marketed by Bristol-Myers Squibb and used to treat diabetes, rose 15.5 percent, nearly six times the rate of inflation.

•  Premarin, marketed by Wyeth-Ayerst for estrogen replacement, rose 12.8 percent, nearly five times the rate of inflation.

•  Demadex, a diuretic, rose 12.4 percent, more than four and a half times the rate of inflation.

Nine more drugs had a price increase of three or more times the rate of inflation, including:

•  Zocor and Lipitor, cholesterol-lowering agents

•  Pepcid, a gastrointestinal agent

•  Claritin, an antihistamine

•  Paxil, an antidepressant

•  Fosamax, for osteoporosis

•  Detrol, for treatment of an overactive bladder.

Of the 50 drugs most commonly used by seniors, the average annual cost per prescription as of January 2001 was $956, according to the report.

Celebrex, an anti-inflammatory agent, has an average annual cost of $1,837; Prilosec, a gastrointestinal medicine, has an average annual cost of $1,511; and Lipitor, for lipid-lowering, has an average annual cost of $1,148.

Of the top 50 drugs for seniors, only 10 are generics. Generics generally cost less than brand-name drugs and can be created only when the patent has expired on the brand name medicine.

The report said seniors make up 13 percent of the nation's population, but consume 34 percent of all prescriptions dispensed and pay 42 percent of the nation's bill for prescription drugs. Yet a third of seniors have no insurance coverage for prescription drugs throughout the year.

"The seniors who rely on these drugs have been regularly and repeatedly hit with price increases for the medicines that keep them healthy," the report said.

Industry spokesman Trewhitt said people who can't afford drugs can apply to pharmaceutical company-sponsored patient assistance programs, which gave away free drugs to 2.5 million Americans last year. In addition, pharmaceutical company sales forces gave physicians $7.2 billion in samples to be given to patients free of charge, he said.

"These are a couple of generous avenues that people can take," said Trewhitt.

But critics say the patient assistance programs are difficult to enroll in and charge that the sales efforts -- called "detailing" -- fatten the bottom lines of drug companies by steering patients toward more expensive drugs that in many cases are no better than cheaper, generic alternatives.

The industry has opposed adding a drug benefit program to Medicare, the nation's health program for the elderly, preferring instead for the federal government to subsidize private insurers to offer drug coverage. If Medicare were to offer a drug benefit, it would likely try to force the industry to reveal its costs in an effort to negotiate cheaper deals.

"To be frank, we want to avoid price controls," Trewhitt said -- in part so that the companies will have enough money to pay for research and development of new drugs, he said.