Prescription drug price increases have been lower than overall medical price increases from July 2004 to July 2005, and lower than the increases in many other consumer goods, Bureau of Labour Statistics show. In addition, a recent paper shows that published reports citing dramatically increasing prescription drug cost trends are seriously flawed, according to the Pharmaceutical Research and Manufacturers of America (PhRMA).

"AARP is up to its usual tricks, but it's a day too late for Halloween. AARP's over-hyped rhetoric has worn thin. The US government's publicly available consumer price data over the past few years clearly show that prescription drug prices increased at rate slower than overall medical care, and much slower than other goods that Americans rely on every day," said Ken Johnson, PhRMA's senior vice president of communications.

According to a PhRMA's release the overall medical care inflation, as reported by the government's publicly available Consumer Price Index (CPI), increased at an annualised rate of 4.2 per cent between July 2004 and July 2005. In contrast, CPI prices for prescription drugs were up by a lesser amount, 3.4 per cent during the same 13-month period. This continues a trend of prescription drug prices increasing more slowly than overall health care prices that dates back over 5 years.

In contrast, the prices of other consumer goods rose sharply. Fuel oil increased a whopping 34.7 per cent over the same July-to-July period, according to the US Department of Labour's Bureau of Labour Statistics. Regular gasoline prices rose 18.1 per cent; fuels 8.5 per cent; airline fares rose 6.8 per cent; and water, sewer, and trash collection services rose 4.9 per cent.

The release further stated that AARP's calculations have previously been shown to be deeply flawed. AARP employs the Wholesale Acquisition Cost (WAC) to measure trends in prescription drug prices. But a July 2005 paper by Joseph Antos and Thomas F. Wildsmith of the American Enterprise Institute (AEI) supports the use of CPI as a better method for accurately measuring these trends. The AEI paper notes that the methods used by AARP to measure trends in drug prices have serious limitations. AARP uses WAC rather than the actual prices paid by seniors at their local pharmacy. Wholesale prices do not incorporate the discounts that are commonly offered by prescription drug manufacturers, and they do not reflect the savings that consumers can realise by careful shopping.

"Experts tell us that AARP's numbers simply do not reflect the true amounts paid by seniors for their medicines," Johnson added. "Unfortunately, AARP seems more interested in getting headlines than in helping America's seniors."

"Beginning in January, America's seniors will get large savings on medicines by enrolling in Medicare's new prescription drug insurance programme. And we are working right now to help people in need get the medicines they depend on. Patients can call the partnership for prescription assistance at 1-888-4PPA-NOW (1-888-477-2669) to find out about programs that provide free or nearly free medicines," stated Johnson.

Since April, over 1 million patients nationwide have been matched with a prescription drug assistance programme through PPA.

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country's leading pharmaceutical research and biotechnology companies, which are devoted to inventing medicines that allow patients to live longer, healthier, and more productive lives. PhRMA members alone invested an estimated $38.8 billion in 2004 in discovering and developing new medicines.