In 2005 drug price increases keep pace with general inflation

According to the latest Consumer Price Index (CPI), prices for prescription drugs and medical supplies increased by 3.5% in 2005 compared to an overall increase of 3.4 % in the CPI for all items. In 2005 the CPI increase for prescription drugs was well below the 4.2 % increase in the CPI for medical care and below the 5.3 % increase for hospital services and the 3.8 % increase for medical professional services.

As America’s population ages, the prevalence and incidence of chronic conditions continue to grow as does spending on medical care. New medicines are helping Americans live longer, with reduced disability, and an improved quality of life. An aging population means that health care spending will continue to grow but most of this spending growth is driven by increased utilization of available treatments rather than by higher drug prices.