AARP's Public Policy Institute finds that average retail price increases for brand name prescription drugs widely used by Medicare beneficiaries far outstripped the price increases for other consumer goods and services between 2005 and 2009; this is consistent with the pattern that we have seen since initiating our ongoing series of studies on manufacturers' prescription drug prices in 2004. In 2009, the average annual increase in retail prices for 217 brand name prescription drugs widely used by Medicare beneficiaries was 8.3 percent, and was notably higher than the rate of increase observed during any of the prior four years (i.e., 2005 to 2008), which ranged from 6.0 percent to 7.9 percent. In contrast, the rate of general inflation was -0.3 percent over the same period. This report presents annual and five-year cumulative price changes through the end of 2009, using both rolling average and point-to-point estimates. The first set of findings shows annual rates of change in retail prices for widely used brand name drugs from 2005 through 2009, using both rolling average and point-to-point measures. The rolling average measure also is used to examine the distribution of retail price changes as well as differences in average percentage price changes for individual manufacturers and therapeutic categories. The second set of findings summarizes the cumulative impact of retail drug price changes that have taken place during the five-year period from 2005 through 2009.
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