Medicare HMO Private Pay		Health Insurance Home Page Shopping Cart	Separate Search Page or search below
Navigation Help			Write To Karl Loren	Table Of Contents

Drug Prices Poised To Rise Again:  WSJ, December 2004

Source

+
	December 6, 2004

HEALTH

Torrid Drug-Price Increases Pause AARP Reports 0.5% Rise On Average in 3rd Quarter; Steeper Gains May Loom By HEATHER WON TESORIERO Staff Reporter of THE WALL STREET JOURNAL December 6, 2004; Page A3 Drug-price increases were unusually light in the third quarter, but they appear to be heating up again. According to a study expected to be released today from AARP, the influential senior citizens' lobby, drug prices in the third quarter rose a minuscule 0.5% on average. In comparison, they rose 3.5% in the first quarter of 2004, and 1.8% in the third quarter of 2003. Despite the slowdown in the third quarter, drug prices for the 12 months ended in September as a whole rose 7.4% on average, AARP said, or more than three times the 2.3% rate of general inflation in that period. "Price increases hurt more than just AARP members," John Rother, AARP director of policy and strategy, said in an interview. "They break state Medicaid budgets and strain employers and health insurers." The study results are being released in conjunction with the announcement today of a new drug-price watchdog program in New York state, a joint effort between AARP and the office of New York Attorney General Eliot Spitzer. The program, already under way on a small scale, will enlist AARP members to report drug prices from their local retail outlets. The AARP study didn't examine the reason for the price trends, but noted that the Medicare drug-discount cards came out in June. Some analysts also believe that aggressive drug-price increases before the election could have made drug companies political targets. Given the election, "to keep a low profile by not going on with standard price increases was probably a good strategy," said Bill Little, president of Delta Marketing Dynamics, a health-care marketing-research company in East Syracuse, N.Y. A spokesman for Pharmaceutical Research and Manufacturers of America, the drug-industry trade association, said, "Under the federal antitrust laws, they have to set their own prices," adding that federal law restricts trade associations from participating in pricing. Drug makers now seem to be stepping up the pace of price increases. In November, nine of the top 50 branded drugs increased in price, up from three in November 2003, according to Delta Marketing Dynamics. Price increases ranged from 1.6% to 6.9%. AstraZeneca PLC said it raised prices last month on its primary-care drugs from 1.6% to 6%. "We take price increases in line with the rest of the industry," a spokeswoman said. GlaxoSmithKline PLC also raised drug prices last month. "Long before the election, we recognized the public concern with access to affordable meds," a spokeswoman said. "We took action to create the orange card [a prescription savings card], which has been around for a couple of years." Drug makers have plenty of incentive to raise prices in advance of the 2006 Medicare drug benefit, when greater pricing pressures are expected. AARP's Mr. Rother said that while many factors drive drug-pricing decisions, "the desire to get the price baseline higher prior to the start of a Medicare drug benefit seems to be one of those factors." Analysts project that drug-price increases will continue to outpace inflation. "These guys need price [increases]," said Richard Evans of Sanford C. Bernstein & Co. "Pfizer, Merck and Johnson & Johnson are all kind of desperate. They need price in order to keep revenues within expected ranges." Pfizer Inc., Wyeth and Eli Lilly & Co. said they didn't raise prices in November and can't comment on future pricing plans. "Eli Lilly & Co.'s pricing decisions are not politically driven, but value-driven," a spokesman said. Write to Heather Won Tesoriero at heather.tesoriero@wsj.com1 URL for this article: http://online.wsj.com/article/0,,SB110229081452091528,00.html   Hyperlinks in this Article: (1) mailto:heather.tesoriero@wsj.com

Copyright 2004 Dow Jones & Company, Inc. All Rights Reserved

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.

SUBSCRIBE:  The Wednesday Letter is a free electronic monthly newsletter written and published by Karl Loren.  You can view more than 50 back issues of this publication by clicking here.  The Wednesday Letter subscription list is maintained on a secure server, no name is ever given or sold to anyone, and it is never used except for this Newsletter.  It is automatically published on the Tuesday night just before the first Wednesday of every month.  You can subscribe to this free monthly electronic letter by entering your eMail address and name below.  You will then automatically receive a request for confirmation, sent to whatever address you have entered.  If you do NOT receive this confirmation request, then you will not be subscribed.  There may have been an error with your address and you should resubmit.  The letter is never sent twice to the same address -- so you do not have to worry about a duplicate subscription.  When you receive this confirmation request you must reply to it, or your subscription will not become active.  No one can subscribe your name, and address, without you being notified, and if you get an unwanted notice of subscription you only need to DO NOTHING and the subscription will NOT be active.

REMOVAL:  You can remove yourself from the subscription list in several different ways.  Click here to read about this entire newsletter system.  Every edition of The Wednesday Letter is delivered to your address with YOUR name and address in view on the letter, with a link that allows you to remove THAT name from the subscription list.  If you try to send this removal message from an address different from the one you used to send in your original confirmation, then you will get a warning notice first, sent to the subscription address, asking you to confirm that you want to be removed from the list -- by replying to THAT request for confirmation, you will then be automatically removed.  Thus, no one else can unsubscribe you, from some other computer, without your knowledge.  But, if you send in the unsubscribe notice from the same machine used to receive the Letter, then the removal from the subscription list is automatic.

Personal Message:  When you send a personal message to Karl Loren, you will receive a personal reply as per his instructions.  Karl pledges that every personal message will get a personal answer. When you provide your mail address, we will send you free information including our free catalog and a cassette tape lecture by Karl Loren about heart disease, no charge, by mail, even if outside the US.  You can select particular information you would like to receive, along with the free cassette tape and catalog.