Helped by Generics, Inflation of Drug Costs Slows

NY Times ^ | September 21, 2007 | STEPHANIE SAUL

[neverdem]

As overall health care costs continue to rise sharply, prescription drugs have emerged as a surprising exception.

Annual inflation in drug costs is at the lowest rate in the three decades since the Labor Department began using its current method of tracking prescription prices. The rate over the last 12 months is 1 percent, according to the government’s latest data, released Wednesday.

“The way the index is going, it looks like drug price increases are not going to be very painful this year,” said Daniel H. Ginsburg, a supervisory economist at the Bureau of Labor Statistics, where he is involved in compiling the Consumer Price Index.

As recently as 2005, inflation in drug prices was running at an annual rate of 4.4 percent.

Economists say the slowdown has come about because more people are turning to generics and because generic versions of some of the most common drugs have recently come on the market.

In the past year and a half alone, generic equivalents have become available for the cholesterol treatment Zocor, the sleeping pill Ambien and the blood pressure drug Norvasc.

Another factor could be the so-called Wal-Mart effect. Last fall, Wal-Mart began offering many generic prescriptions at $4 a month. Target quickly announced a similar plan, and Kmart expanded its program, which offers a 90-day supply of generic drugs for $15. Other retailers have followed with their variations. Publix, a grocery store chain with 684 pharmacies in five states in the Southeast, announced last month that it would not charge for prescriptions for seven commonly used antibiotics.

To be sure, the government still expects spending on medications to rise, to nearly $500 billion a year within a decade, up from an estimated $275 billion this year. That will happen as more people take more drugs and as new...

[neverdem]

[iowamark]

Tell your Lib friends: “Thank God for Wal-mart!”

[ARE SOLE]

Are these generics Chinese I am wondering?

Regards

[The Cuban]

Oh no! We must pass legislation extending patents! I love conservatives who want to estend intellectual property law to extremes not supported by hundreds of years of historical commercial precedent (e.g.20 year patents). Good.The reason drug prices are so high are drug companies and their lobbyists. Let them hurt. Let the consumer benefit from competition.

[HiTech RedNeck]

That’s not allowed for prescription medicines, though “dietary supplements” (vitamins and the like) can be and are largely made with Chinese content.

[iowamark]

No, they are usually made by the same companies that make the name brands.

See:

www.crbestbuydrugs.org

and, if you are having trouble paying for prescriptions:

http://www.needymeds.com/

[iowamark]

That link is:

http://www.crbestbuydrugs.org/

[ARE SOLE]

That’s not allowed for prescription medicines, though “dietary supplements” (vitamins and the like) can be and are largely made with Chinese content.

Thanks man, I always wondered about that.

Regards

[ARE SOLE]

Thanks for the info.

Regards.

[syriacus]

Thanks for posting this, neverdem!

[sheana]

My mother has Medicare Part D. We switched her to all generics at Target for $4.00 each. She takes 6 meds so they cost her $24.00 total for the month.
She was paying up to $20 ea through Medicare. That was before she reached the Doughnut Hole and Part D paid for nothing.
This $4 program saves her a ton of money.

[upchuck]

The repackaging of generics should be criminal.

Let's look at Lotrel 10/20 a common high blood pressure medicine.

It consists of two medicines. 10mg of amlodipine, a generic drug, and 20mg of benazepril, another genric drug.

You can buy a 30 day supply of these generic drugs at Wally World for $47 and $4 respectively, or about $1.70 per day

But Novartis, the company that markets Lotrel, combines these two generics and puts them in a purple capsule. A 30 day supply of these capsules costs $87.90 at Wally World, or about $2.93 per day.

Outrageous? You betcha!!

[endthematrix]

" Let the consumer benefit from competition."

You mean the type of "competition" of large pharma investing millions into a product and having a start-up, who can't develop its own, make knock-offs?

[endthematrix]

I presume it’s because Novartis is the company who invested the R&D. It cost them more to produce it. The generics in question come from the brands Norvasc and Lotensin, from Novartis Pharmaceuticals.

[The Cuban]

Exactly. Its the way the market works. No one should be granted an unwarranted monopoly.