The Government Accountability Office released a report today on retail drug price trends.

GAO found that the average monthly usual and customary [or retail] prices reported by two state pharmacy assistance programs [New York and Pennsylvania] increased 13.6 percent from January 2004 through January 2007 for a typical 30-day supply of the 122 prescription drugs frequently used by BCBS FEP Medicare or non-Medicare enrollees. This represents a 4.3 percent average annual rate of increase. Prices increased at similar rates for the 96 drugs frequently used by BCBS FEP Medicare enrollees and the 91 drugs frequently used by BCBS FEP non-Medicare enrollees. We also found that the average monthly usual and customary prices decreased for the 57 generic drugs and increased for the 65 brand drugs from January 2004 through January 2007. Specifically, the generic drug prices decreased 12.8 percent, a 4.5 percent average annual rate of decrease, while the brand drug prices increased 21.2 percent, a 6.6 percent average annual rate of increase. During the same period, based on nationwide data from the Bureau of Labor Statistics, prices for all consumer items for all urban consumers–the Consumer Price Index (CPI)–increased 9.3 percent, a 3.0 percent average annual rate of increase. We also found that from January 2000 through January 2007, average monthly usual and customary prices increased at a faster rate for the 44 brand drugs than for the 43 generic drugs. Specifically, prices for the brand drugs increased 48.6 percent, a 5.8 percent average annual rate of increase, while prices for the generic drugs increased 7.1 percent, a 1.0 percent average annual rate of increase. During this same period the CPI increased 19.9 percent, a 2.6 percent average annual rate of increase.