Put all your prescription drugs in a basket and compare their prices over the past four years with the price of other medical goods and services. According to the U.S. Government Accountability Office, the "usual and customary" price index for the top 100 commonly used drugs increased by an annual average of 6.6 percent from 2006 through the Q1 2010. That's compared with an average annual increase of 3.8 percent for nonprescription medical costs.
Now, take that basket and remove all your generic drugs, keeping only the brand names. That annual increase takes you to 8.3 percent. Switch it around and put the generics in the basket, taking out the brand names, and then you're talking a 2.6 percent drop in the annual price of prescriptions.
"This report reminds us that this is an area where we should be looking for savings for taxpayers and beneficiaries," Democratic Rep. Pete Stark, a ranking member of the House Ways and Means subcommittee on health, told Reuters. The Pharmaceutical Research and Manufacturers of America said it was "pleased" that the GAO took into account the mix of brand and generic medicines, which reflects actual consumer habits.
- check out the GAO report
- see the PhRMA statement
- read the Reuters story