Prescription drug prices soar for U.S. seniors

The prices for about 200 prescription drugs commonly used by seniors in the United States rose nearly twice the rate of inflation, a seniors group said Tuesday, making a case for letting the government negotiate drug prices.

Insomnia pill Ambien, made by Sanofi-Aventis, topped the list with a 30 percent rise in price in 2006, said the report by the seniors' lobby AARP, formerly known as the American Association of Retired Persons.

AARP, which lobbies for 38 million Americans over the age of 50, used the report to support an effort to give the federal Medicare agency the authority to negotiate drug prices with pharmaceutical companies. Medicare is the federal health-insurance program for about 43 million elderly and disabled.

A loud and clear message
"We need to send a loud and clear message to the pharmaceutical industry that Americans cannot afford to continue to pay the highest prices for prescription drugs in the world," said David Sloane, senior managing director for government relations.

Backing from AARP was key in the passage of the law in 2003 adding a prescription drug benefit to the Medicare program, which since its inception in 1965 did not cover drugs.

The drug industry's trade group, the Pharmaceutical Research and Manufacturers of America, or PhRMA, called the report flawed and said giving Medicare bargaining power would limit the number of drugs the agency paid for.

The group also cited data it said found 2006 was the sixth straight year of slowing growth in prescription drug spending.

Still, a government report issued last month found spending on prescription drugs was likely to fuel a doubling of U.S. spending on health care over the next decade, to $4.1 trillion from $2.1 trillion in 2006.

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All U.S. spending on prescription drugs rose 5.8 percent in 2005, to $200.7 billion, another government report found.

Following Ambien, AARP said the manufacturer prices for respiratory products Combivent and Atrovent rose 18 percent and 17 percent, respectively. Both are made by Germany's privately held Boehringer Ingelheim Pharmaceuticals.

Prices for the most popular drugs used by senior citizens rose about 6.2 percent, nearly twice the 3.2 percent rate of inflation for 2006, according to AARP.

Lawmakers in the U.S. Congress, mostly Democrats, are pushing to give the Medicare agency the power to negotiate drug prices, although the Bush Administration opposes it.

The U.S. pays some of the steepest prices in the world for prescription drugs, as many other countries have some type of price regulation. Drugmakers say that, in part because of cost controls elsewhere, they need higher prices here to recoup profits for research and development.