Following five years of slower growth, prescription drug makers increased their prices by nearly 9 percent last year ...

NationalJournal.com - April 16, 2009

Following five years of slower growth, prescription drug makers increased their prices by nearly 9 percent last year, promising higher premiums in Medicare's prescription drug benefit (Medicare Part D) next year, according to a new study by AARP's Public Policy Institute.

AARP measured price increases for those prescriptions most widely used by Medicare beneficiaries, and found that the 8.7 percent increase from 2007 to 2008 was more than twice the 3.8 percent rate of general inflation. Between 2002 and 2007, the increases ranged between 5.3 percent and 7.4 percent. Prices for generic drugs, meanwhile, declined by 11 percent. "A person taking three brand name prescription drugs could see his or her annual costs climb by more than $550 in just one year," said AARP Public Policy Director John Rother.

Higher drug manufacturer prices can get Medicare beneficiaries to the "doughnut hole" -- the gap in coverage when enrollees have to pay all of their drug costs -- quicker. Higher costs for drug plans "likely result in reduced benefits and/or higher premiums to enrollees," according to the report.

Read The AARP Report

### Source: NationalJournal.com