Prescription Drug Costs Skyrocket
NEW YORK (MainStreet) — The cost of staying healthy is increasing fast enough these days to make one feel sick again.
Prices for the 100 most commonly used prescription drugs increased at an average annual rate of 6.6% from 2006 through the first quarter of 2010, or nearly twice as much as the cost of medical goods and services increased on average during that period, according to a new report from the nonpartisan U.S. Government Accountability Office.
Much of the increase was driven by the rising cost of brand name drugs. Of the 100 drugs analyzed, 55 were brand name while 45 were generic, and according to the GAO report, the price of brand name drugs increased by an annual average of 8.3% while that of generic drugs increased by just 2.6%.
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By comparison, the study says that consumer price index for medical costs increased by an average of 3.8% annually during the period, which means generic drugs are actually a better deal now compared to the rest of the market. However, prices of consumer products overall (known as the CPI-U) increased by 2.2% annually during this period, indicating that even the cost of generic drugs increased more than the average item in a consumer’s shopping cart.
Several drugs on the list experienced price increases of as much as two to three times the average. The cost of Ambien, a drug to help patients sleep, increased at an average rate of 15.3% each year while the cost of Flomax, a drug for men with prostate problems, increased by 17.6% annually, the most on the list.
As steep as these price increases are, they are nothing new for the medical market. A previous study from the GAO found that the price of brand name prescription drugs increased by 6% each year from 2000-2007.
The current report is based on data from Blue Cross-Blue Shield about the most used drugs paired with average quarterly wholesale prices of each drug on the list.
The price increases during the past decade have contributed a startling increase in the amount U.S. consumers pay for medicine. In total, Americans spent $250 billion on prescription drugs in 2009, according to the GAO, nearly twice the total amount spent back in 2000.
Fortunately, while the cost of drugs continues to increase, several other essentials like household supplies and electronics have actually gotten cheaper in the past year.
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