Price trends for frequently used brand and generic drugs, 2000-2004

Prescription drug spending has been the fastest-growing segment of national health expenditures. As the federal government assumes greater responsibility for prescription drug expenditures with the introduction of Medicare part D, federal policymakers are increasingly concerned about prescription drug prices. The U.S. Government Accountability Office (GAO) was asked to examine the change in retail prices and other pricing benchmarks for drugs frequently used by Medicare beneficiaries and other individuals with health insurance from 2000-2004. According to GAO in this white paper, average usual and customary (U&C) prices at retail pharmacies reported by two state pharmacy assistance programs for a 30-day supply of 96 drugs frequently used by Medicare and non-Medicare enrollees increased 24.5 percent from January 2000 to December 2004.

Of these 96 drugs, 20 accounted for nearly two-thirds of the increase in the U&C price index, and the average U&C prices for 50 frequently used brand prescription drugs increased three times as much as the average for 46 generic frequently used prescription drugs.

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