The pharmaceutical industry has been a frequent target in this presidential campaign, but that hasn't stopped it from continuing to aggressively raise the prices of prescription drugs.
Drug companies increased wholesale prices for the 50 top-selling branded medicines by an average of 7.82 percent in 2007, after increases of 6.73 percent and 6.22 percent in the previous two years, said Delta Marketing Dynamics Inc., a health-care marketing research company. The most recent increase is almost double the overall U.S. economy's 4.1 percent annual inflation rate last year.
In some instances, drug makers are raising prices on medications that are due to lose patent protection so that customers will switch to — and continue to buy — similar, newer products that enjoy market exclusivity well into the future.
It's a tactic that pharmaceutical companies use "to shift patients to next-generation drugs by making old ones so expensive," said Michael Krensavage, a drug-industry analyst with Raymond James & Associates.
People are also reading…
For example, Sanofi raised Ambien's price ahead of its loss of patent protection last year so that it was more expensive than Ambien CR, a new formulation, to encourage patients to switch to Ambien CR, which will be patent-protected for several more years.
The Delta Marketing figures represent the wholesale acquisition cost, which is the manufacturers' list price for a drug; it doesn't reflect underlying rebates and discounts given to wholesalers and large buyers such as health insurers. While the wholesale list price isn't what most customers pay, raising it may help boost the starting point for negotiating a final price.
"Companies are under great pressure to deliver revenue, and it's becoming increasingly difficult to do so as generics displace profitable brands," said William R. Little, president of Delta Marketing of East Syracuse, N.Y.
Rising drug prices
Drug: antidepressant Wellbutrin XL
Maker: GlaxoSmithKline PLC
Price increase from 2005 to 2007: 44.5 percent
Drug: sleep drug Ambien
Maker: Sanofi-Aventis SA
Price increase: 70.1 percent
Drug: attention-deficit disorder medication Adderall XR
Maker: Shire PLC
Price increase: 33.5 percent
Drug: cholesterol-fighting Lipitor
Maker: Pfizer Inc.
Price increase: 16 percent