Prescription drug costs

Stacey Vanek Smith Jun 23, 2006

TEXT OF STORY

MARK AUSTIN THOMAS: Think gas prices are bad? Try looking at the price tag on prescription drugs. They’ve risen three times faster than the rate of inflation this year. Stacey Vanek-Smith tells us why.

STACEY VANEK-SMITH: The report found brand-name drug prices jumped nearly 4 percent in the first quarter. The cost of generics didn’t budge. Why the big difference?

JOHN ROTHER: I think the drug industry has a lot of explaining to do.

The AARP’s John Rother.

ROTHER: Prices from the manufacturer pass through to those of us who help finance that, whether we’re taxpayers or whether we pay premiums.

Do big drug companies need that money? Milken Institute Industry analyst Ross DeVol says yes.

ROSS DEVOL: Drug manufacturers are under a lot of pressure on their bottom lines. They’re looking at pricing mechanisms to try and cover their increased costs in bringing drugs to market.

As much as a third of the industry’s sales revenue could dry up in the next couple of years as many of the top-selling drugs go off patent.

I’m Stacey Vanek-Smith for Marketplace.

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