Drug Costs Soar (Again) in 2009

Prices for brand-name prescriptions soared 9.1 percent during 2009, which was the largest increase in the past five years, according to Express Scripts, a pharmacy-benefit manager quoted by the Wall Street Journal.

For 2009, the Bureau of Labor Statistics reports that the Consumer Price Index for Urban Consumers (CPI-U) rose 2.7, so branded prescriptions rose about 3.4 times faster than the all-items CPI-U.  For 2009, Medical Services component of CPI-U increased only 3.4 percent, meaning branded prescription drugs rose 2.7 times faster.

For 2009, CPI-U measured the increase in professional services at only 2.5 percent.  Even hospital and related service costs, one of the most rapidly increasing components of medical services, rose just 7.1 percent.  So branded prescriptions rose 3.64 times faster than physician services and and 32 percent faster than hospital costs. 

As Kaiser reports here, there have been many years in which prescription drug pricing has outpaced other health costs.  In fact, 2009 represents the eleventh year of the past 14 in which drug prices have risen faster -- sometimes far faster -- than the prices of professional services or hospital care.  Here's the picture.  (Click to enlarge graph.)